Globalisation

Views:
 
Category: Education
     
 

Presentation Description

No description available.

Comments

By: raunakjain (103 month(s) ago)

sir can you please mail the ppt on raunak2021@gmail.com please i will be very grateful to you

By: vnebulae (103 month(s) ago)

Fantastic and simple

By: sonia23singh (122 month(s) ago)

sir Can you please mail the ppt on sonia23singh@gmail.com

Presentation Transcript

Globalization: 

Globalization Nature of Economic Globalization

Globalization exists with many interpretations but a clear concept is often missing: 

Globalization exists with many interpretations but a clear concept is often missing Tends to be used as ‘internationalization of economic activity’ in terms of greater integration and interdependence eg. European Commission 1997 “ Globalization can be defined as the process by which markets and production in different countries are becoming increasingly interdependent due to the dynamics of trade in goods and services and flows of capital and technology.” Globalization is an on-going process dated back to 1700s

Any distinction between ‘globalized world economy’ and ‘inter-nationalized world economy’: 

Any distinction between ‘globalized world economy’ and ‘inter-nationalized world economy’ Globalized Principle entity is the ‘global economy’ An economy exists ‘above’ national economies that escapes governance or regulation (dominated by market forces) Inter-nationalized Principle entities are the ‘national economies’ Continued separation of ‘domestic’ from ‘international’, governance or regulation possible

Globalized: 

Globalized TNCs: footloose capital searching the globe for competitive advantage Global economy would be structured ‘downwards’ from the global level to the national levels MNCs: a company still with clear home orientation, character and base Inter-national economy would be structured ‘upwards’ from the national economies to an international level Inter-nationalized Distinction made by Hirst and Thompson 1999

Another definition of the unique feature of the period of ‘globalization’: 

Another definition of the unique feature of the period of ‘globalization’ Borders are no longer the key feature of the present international system The ‘global’ is the ‘local’ ie. Glocalization To insert international features directly into the local level eg. The establishment of international standard setting practices eg. ISO International Standard Office Most features are from the supra-national organisation such as World Bank, IMF, WTO

Measuring the extent of internationalization: 

Measuring the extent of internationalization Trade flows Capital flows Long term Short term

Long term trends in world trade and output 1950-94: 

Long term trends in world trade and output 1950-94

Ratio of trade to GDP at current prices of various years (%): 

Ratio of trade to GDP at current prices of various years (%) It is the rising ratio since 1950 that is focused upon by those who stress the extent of globalization, but this fails to take account of the previous high point of globalization between 1870-1914

It is the growth of FDI after 1980 that has been taken as the central indicator of the development of globalization.: 

It is the growth of FDI after 1980 that has been taken as the central indicator of the development of globalization. To Thompson, the fall of FDI in early 1990s as a result of economic recession indicated that the economic crisis in 97-98 might add disruption to the increasing trend and, thus the direction remains ambiguous. A more accurate sense of growth of FDI can be obtained from looking at its ratio to GDP. Thompson uses G7 figures as an example to show that there is not much change in the ratio.

Real foreign direct investment flows 1970-95 (1966 US$ billions): 

Real foreign direct investment flows 1970-95 (1966 US$ billions)

Capital flows to the G7 countries as a percentage of their combined GDP, 1870-1994: 

Capital flows to the G7 countries as a percentage of their combined GDP, 1870-1994

Again this figures shows that the capital flows among advanced countries has been growing since 1960s, but it was much greater during the Gold Standard period (1870-1913).: 

Again this figures shows that the capital flows among advanced countries has been growing since 1960s, but it was much greater during the Gold Standard period (1870-1913). However, there is undoubted changes in recent period that result in the expansion of short term capital flows. Abandonment of the post-WWII semi-fixed exchange rate system (Bretton Woods system) after 1973 Abandonment of capital controls and the liberalisation of financial systems in 1980s

Thompson’s argument: the extent of globalization has been severely exaggerated.: 

Thompson’s argument: the extent of globalization has been severely exaggerated. No significant increase in trade flows as % of GDP Uncertain direction of FDI The Triad (US & Canada, EU, Japan) though accounted for 66% of world trade in 1996, was still relatively internationally un-integrated in the mid 1990s.

Trade flows as % of originating Triad bloc country GDP (1996) : 

Trade flows as % of originating Triad bloc country GDP (1996)

Slide16: 

Only intra-European trade is high (16.9%) Another source indicated that only 10% of Triad output is exported FDI is under 10% of any Triad member’s GDP Low foreign participation in the financial systems of the Triad countries, despite their open and liberal financial markets. Eg. foreign assets held by USA households was only 11% of total household financial wealth at end of 1995  Financial activity and wealth still remained largely a domestic affair in mid 1990s.

What about the trade between North and South?: 

What about the trade between North and South? Figures up to early 1990s indicated that the level of trade (% of GDP) was also low between North and South. It was about 2.5% in 1962 and 3.7% in 1992. However, trade among OECD countries increased from 6% to 11% between 62-92. There was a rapid increase in trade flows between USA and Non-OECD countries between 62-92. (from around 1% to 3%)

What has been the impact of increasing trade flows on the employment and wages of the North? : 

What has been the impact of increasing trade flows on the employment and wages of the North? Empirical studies conclude that North-South trade and migration accounted for between 10%-20% of the collapse of unskilled workers’ wages and employment in the North. The remaining 80%-90% was accounted for by adverse technological developments (mechanization). Thus, the impact of ‘globalization’ on the prospect of the Northern unskilled workers would account for no more than 20% of the decline in their employment conditions.

Some points to be noted:: 

Some points to be noted: Trends for increasing sub-regional trade and investment in East Asia and South America China has become the single largest recipient of FDI amongst the developing countries. Increasingly difficult to identify the home country of FDI The degree of real productive integration (excluding short term capital flows) remains low. By 1995 foreign based output was estimated at just 7.5% of world production (compared with 4.5% in 1970)

Slide22: 

FDI only contributed about 5.2% of the world’s gross fixed capital formation in 1995, so there is still no substitute for domestic saving for the process of economic development. The financial systems will continue to change with the change in exchange rate systems. (Gold standardbretton Woods SystemFloating rate regime) Why should the existing relatively unregulated regime last for ever?

Slide23: 

Recent financial crisis has led to re-regulation The development of Euro will reduce the possibilities for speculative activity and help to stabilize the international financial systems Suggestion: to ‘re-tariffise’ capital flows, particular short term capital flows eg. Tobin tax “in many ways the international economy is not as ‘globalized’ as it was at the end of the Gold Standard period in 1913.” “We still tend to live in an ‘inter-nationalised’ world economy rather than a ‘globalized’ one.”

authorStream Live Help