THE GLOBALIZATION OF WORLD ECONOMICS:

INTERNATIONAL TRADING SYSTEMS

Increased trade also means that investments are moving all over the world at faster
speeds. The International Monetary Fund (IMF) regards “economic globalization” as a
historical process representing the result of human innovation and technological progress. It is
characterized by the increasing integration of economies around the world through the
movement of goods, services, and capital across borders. According to the United Nations
Conference on Trade and Development (UNCTAD), the amount of foreign direct investments
flowing across the world was US$57 billion in 1982. By 2015, that number was US$ 1.76
trillion. These figures represent a dramatic increase in global trade in the span of just a few
decades. These days, supercomputers can execute millions of stock purchases and sales
between different cities in a matter of seconds through a process called high frequency trading.
This aims to trace how economic globalization came about. It will also assess this globalization
system, and examine who benefits from it and who is left behind.
International trading systems are not new. Even before trading between countries already
existed. Now we have so many ways of trading either goods or services in just one press of our
fingertip in our computer. In ancient times route and forms of trading are just only limited and
are not available across the world. But, as time passes, as also the human world is rapidly
changing also the human needs and wants rapidly increases and we need to fulfill this human
needs and wants.
Silk Road is known as the oldest international trade route, a network of pathways in
ancient world. Traders used the Silk Road regularly from 130 BCE until 1453 BCE. But this
Silk Road is not truly global because it had no ocean routes that could reach the American
continent. According to Flynn and Giraldez trace back to 1571 with the establishment of
galleon trade that connected Manila and Acapulco in Mexico and this was the first time that
Americans were directly connected to Asian trading routes. A more open trade system emerged
in 1867, following the lead of the United Kingdom, the United States and other European
nations adopted the gold standard at an international monetary in Paris. Despite facilitating
simpler trade, the gold standard was still a very restrictive system, as it compelled countries to
back their currencies with fixed gold reserves. Returning to a pure standard became more
difficult as the global economic crisis called the great depression started during the 1920 until
1930. This depression was the worst and longest recession ever experienced by the western
world. Economic historian Barry Eichengreen argues that the recovery of the United States
really began when having abandoned the gold standards, the government was able to free up
money to spend on reviving the economy. Today, the world economy operates based on what
are called fiat-currencies that are not backed by precious metals and whose value is determined
by their cost relative to other currencies. This system allows governments to freely and actively
manage their economies by increasing or decreasing the amount of money in circulation as
they see fit.
 Therefore, the international trading systems really helps every country to increased their
economy and because of this it offers many and great opportunities to every individuals. Even
before, although the routes and ways of trading across each countries are only limited but as
we people increased our needs and wants the world also will bent out to supply our needs and
wants. Trading helps us a lot because, there are some goods and services are not available in
our country and only other countries can supply this goods and services. In t5his manner
international trading really fulfills our human consumption and this not only beneficial for one
country but for the both who are in this business trading, and also this contributed a lot for the
economic growth of one’s country.

1. Claudio, L & Abinales, P. (2018): The Contemporary World, 839 EDSA, South
Triangle, Quezon City: C&E Publishing, Inc.
2. Dennis O. Flynn and Arturo Giraldez, “Born with a Silver Spoon”: The Origin of
World Trade in 1571, “Journal of World History 6, no. 2 (1995):201.
3. International Monetary Fund, “Issues Brief-Globalization: A Brief Overview” May
2008,https://www.imf.org/external/np/exr/ib/2008/053008.htm(last accessed March 9,
2017)
4. Barry Eichengreen, Globalizing Capital: A History of the International Monetary
System, Second Edition (Princeton: Princeton University Press, 2008), 87.
5. World Trade Organization, “World Trade Report: Factors Shaping the Future of World
Trade” n.d.,60.

CHARLYN JOY A. ABAŇAS BTLE-HE-1A