CHAPTER 2

THE GLOBAL
ECONOMY
 Origin of Economic Globalization
It can be traced from history the time when there was an
economic movement in Asia, Africa and Europe called the
Silk Road, a trade route which connects the East,
particularly China, and the West. This route brings us to
the history of how Philippines was discovered by the
Portuguese and Spain envoys in search of spices and
eventually led to colonization.

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 At this present day time, foreign expatriates
come to the country to manage their
company’s foreign subsidiaries. Likewise, the
Philippines send thousands of skilled workers to
the Middle East as construction workers,
seafarers, nurses ,etc.

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Economic globalization refers to
the expanding interdependence of
world economies.

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The term global economy also refers
to the interconnected worldwide
economic activities that take place
between multiple countries.
These economic activities can have either a positive
or negative impact on the countries involved.
 The International Monetary Fund
(IMF) also defined Economic
Globalization as a historical process,
the result of human innovation and
technological progress(IMF,2008)

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 How does global economy work?
A global economy is one in which goods and
services are traded across national borders.
Because the trade is among sovereign nations,
those nations may enact trade restrictions that
alter free market out comes.

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 The New World Economy is characterized by:
1. More options for production. No matter what your
production process, the chances are that the same
capabilities exist elsewhere.
2. The chance to create new markets
3. Small firms can think big
4. A more level playing field

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 5. Networks are important
6. Culture is no constraint

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 Specific actors that facilitate economic globalization are highlighted as
follows:
1. The International Economic and Financial Organization
2. The International Governmental Organization (IGOs)
3. The Media
4. The Multilateral Development Banks
5. The Nation-States
6. The Non-Governmental Organizations (NGOs)
7. The Trans-National Corporations (TNCs)
8. The United Nations (UN) System

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Thank you