Baay, Trisha Joy September 27, 2023

Barron, Angela The Contemporary World

Berri, Nathañel Rhamil
De Leon, Leanna Ashley
Nono, Melchor Jr.
Rabino, Jules Anne
BSHM701 – TEAM MINION

02 WORKSHEET 1

What is economic globalization?

Economic globalization is a historical process, the result of human innovation and
technological progress. It refers to the increasing integration of economies around the world,
particularly through the movement of goods, services, and capital across borders.
Is economic globalization a new phenomenon?
Can thus have several interconnected dimensions, such as (1) the globalization of trade of
goods and services; (2) the globalization of financial and capital markets; (3) the globalization of
technology and communication; and (4) the globalization of production. Just as there is no single
definition of globalization, there is no consensus on its origin, either. Yet, if we accept that economic
globalization is a process that creates an ‘organic system’ of the world economy, it seems reasonable
to look beyond the last 30 years or so. The question necessarily arises how far we should look back.
What are the differences and similarities between convergence and divergence?
Contemporary globalization is, however, considered to be a myth (Bairoch, 1993) not just because it
is not without precedents. More concerns have been raised with regard to its impact on the worldwide
distribution of income. Those in support of economic globalization emphasize its ability to foster
universal economic growth and development. Dollar and Kraay (2002) argue that only non-globalizer
countries failed to reduce absolute and relative poverty in the last few decades. On the other hand,
countries that have embraced globalization (proxied by trade openness) have benefited from openness
considerably. Consequently, ‘the problem is not that there is too much globalization, but that there is
far too little’. On a more balanced account, the World Bank (2002) claims that globalization can indeed
reduce poverty but it definitely does not benefit all nations. Sub-Saharan Africa, where roughly half of
the population lives on less than US$1.25 (in purchasing power parity) a day, has been especially
marginalized by globalization.
What does International Monetary Systems do?
Its regimes can be thought of as all the ‘implicit and explicit principles, norms, rules, and
decision-making procedures around which actors’ expectations converge'. Consequently, an
international monetary system or regime ‘refers to the rules, customs, instruments, facilities, and
organizations for effecting international payments’ (Salvatore, 2007: 764). In the liberal tradition, the
main task of an IMS is to facilitate cross-border transactions, especially trade and investment. Also, it
also reflects economic power and interests, as ‘money is inherently political, an integral part of “high
politics” of diplomacy'.
What is The Gold Standard?
The gold standard functioned as a fixed exchange rate regime, with gold as the only
international reserve. Participating countries determined the gold content of national currencies, which
in turn defined fixed exchange rates (or mint parities) as well. Consequently, ‘common adherence to
gold convertibility linked the world together through fixed exchange rates. In order to assess whether
the gold standard was successful, a good reference point is offered by Eichengreen (1996: 1), who
claims that the role of a properly designed IMS ‘is to lend order and stability to foreign exchange
markets, to encourage the elimination of balance-of-payments problems, and to provide access to
international credits in the event of disruptive shocks”’.
What are the roles of The Bretton Woods System and Its Dissolution?
The Bretton Woods System required a currency peg to the U.S. dollar which was in turn
pegged to the price of gold. The Bretton Woods System collapsed in the 1970s but created a lasting
influence on international currency exchange and trade through its development of the IMF and
World Bank.
What does European Monetary Integration do?
In the post-World War II era, the United States originally wanted to implement the
Morgenthau Plan, which intended to downsize the German economy into a pastoral and agricultural
one. European monetary integration refers to a 30-year long process that began at the end of the 1960s
as a form of monetary cooperation intended to reduce the excessive influence of the US dollar on
domestic exchange rates, and led, through various attempts, to the creation of a Monetary Union and
a common currency.
What are International Trade and Trade Policies?
The late Nobel-laureate economist, Paul Samuelson, was once asked if he could name one proposition
which he considered as both valid and non-trivial in the social sciences. Samuelson famously referred
to David Ricardo's comparative advantage theory (Samuelson, 1995). According to Ricardo (1817), a
country such as England could benefit from voluntary trade even if its trading partner (which in the
original example was Portugal) was more effective in producing both wine and clothing. England
should specialize in the production of the good with less disadvantage and let Portugal produce the
other product. International trade is the buying and selling goods between various countries.
International trade policy can be defined as the government's rules and regulations guiding and
controlling how trade is done with foreign countries.
What is Unilateral Trade Order?
In seventeenth- and eighteenth-century Europe international trade was basically a means to
accumulate surplus (gold reserves) in the balance of payments by stimulating export and restricting
import. The mercantilist era of the time was best characterized, therefore, as a zero-sum game on the
global level. Trade and trade policies served the interest of monarchs from Portugal to England, who
financed wars and consolidated authority over domestic constituents with the help of accumulated
gold stocks. Unilateral trade agreements are one-sided, non-reciprocal trade preferences granted by
developed countries to developing ones, with the goal of helping them to increase exports and spur
economic development. They are meant to. foster exports and economic development in beneficiary
countries.