THE GLOBALIZATION

OF WORLD
ECONOMICS
Learning Objectives

1.Define economic globalization;

2.Analyze the actors that facilitate economic globalization

3.Articulate your stance on global economic integration.

Economic globalization

Refers to the expanding interdependence of world economies. It’s a

growing scales of cross-border trade of commodities and services,

flow of international capital and wide rapid spread of technology-

(Shangquan 2000)
◦ The International Monetary Fund (IMF) regards

“economic globalization” as a historical process

representing the result of human innovation and

technological progress.
Benczes’ Four Interconnected Dimensions
Of Economy (2014)
1. Globalization of foods trades and services. -Ex. Creation of world trade organization in 1995.

2. Globalization of financial and capital markets.- ex. Cross listing of shares, cross hedging and

diversification of portfolio and round the clock trading worldwide.

3. Globalization of technology and communication.- emphasizes that various transactions and inter

activities that transpire instantly due to the internet and communication technology.

4. Globalization of production. Multinational Corporation MCN’s and Transnational Corporations TNC’s

 The Actors That
◦ Nation- States –imposes tax and tariffs on trades Facilitate
◦ Global corporations- local companies have
Economic
Globalization
expanded outside their home country.

◦ International Monetary System- refers to

internationally agreed rules, conventions, and Gold Standard

institutions for facilitating international trade,

Bretton Woods System
investments and flow of capital among nation-
European Monetary System
states
The Bretton Wood System
After the two world wars, world leaders
sought to create a global economic system
that would ensure a longer- lasting global
peace.
Bretton Woods System was largely influence
by the ideas of British Economist John
Maynard Keynes.
Keynes believed that economic crises occur
not when a country does not have enough
money, but when money is not being spent
and, thereby not moving.
Delegates of the Bretton woods agreed to
create two financial institutions:
1. International bank for Reconstruction and Development (IBRD/
World Bank) to be responsible for funding postwar reconstruction
projects.

2. International Monetary Fund (IMF)- global lender of the last resort

to prevent individual countries spiraling into credit crises.
Economic Globalization Today
◦ In the past, those that benefited the most from free trade were the
advance nations that were producing and selling industrial and
agriculture goods.

◦ The United States, Japan, and the member- Countries of the European
Union were responsible for 65 percent of global exports.

◦ The developing countries only accounted for 29 percent.

By 2011, developing countries like the Philippines, India, China, Argentina
and Brazil accounted to 51 percent of global exports while the share of
advance nations- including the United States- had gone down to 45 percent.

World Trade Organization (WTO)- a new organization founded in 1995 to

continue the tariff reduction under the General Agreement on Tariffs and
Trade (GATT)

The series of trade talks under the WTO have led to unprecedented reductions
in tariffs and other trade barriers, but these process have often been unfair.
◦ Develop Countries are often protectionists, as they repeatedly
refuse to lift policies that safeguard their primary products that
could other overwhelmed by imports from the developing
countries.

◦ Protectionism- when a government legislates policies to reduce or

block international trade.

◦ The best example of it is Japan, Japan strong-minded refusal to

allow rice imports into the country to protects its farming sector.
◦ Globalization is anchored on changes in the economy.

◦ Global culture, for example, is facilitated by trade.

◦ Filipinos would not be as aware of American Culture if not

for the Trade that allows local to watch American movies,
listen to American music, and consume American products.
Conclusion
◦ Governments must also continue to device ways of
cushioning the most damaging effects of economic
globalization, while ensuring that its benefits accrue for
everyone.
1. How do economic forces
facilitate the deepening of
globalization?

2. How is the Philippines Central to

Assignment
the History of Economic activity:

Globalization?