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Unformatted text preview: September 4, 2009 Lecture 1 Internationalization v. Globalization Internationalization : extent to which different national economies interact with one another through the exchange of goods and services. • Indicators: trade/production • Exports+imports/GDP • Looking at such an indicator over time, we see the degree of economic openness of the country • Focus on ‘extension’ of economic activities across national boundaries (i.e. arms length trade) • Quantitative Globalization (economic): involves more than simply increased international trade • Set of processes through which economic activities are increasingly interconnected • Functional integration of production activities (MNC’s) • Goods use parts manufactured in different areas • Emergence of new set of actors on global stage (institutions, WTO, WB, IMF) • Qualitative changes facilitate global integration The Debate: Competing explanations 1) Hyperglobalizers : • New world economic order; ‘borderless’ economy • See the nation state as having lost influence; not the primary container of economic space • Global actors more important where goods and people flow with no barriers • Triumphalist accounts: F.Fukuyama, T. Friedman. o In 1992, Fukuyama writes ‘end of history’. Sees falls of berlin wall as where capitalism is new economic model o Friedman, ‘world is flat’ saying that geography doesn’t matter, field has been leveled by globalization 2) Skeptics : • Economic globalization=overblown, a myth or mislabeling of internationalization 3) Transformationalists: • Globalization=on-going transformative set of processes that are open ended; not the end form • Uneven patterns of development (i.e. wealth) • National economic space does not equal national territorial borders (more than arms length trade) • Emphasis on local-global connections Is economic globalization new? • Skeptics will argue globalization is old process • Pre 1500, china and India traded wit SE Asia, eastern Europe, Islamic world and Mediterranean • Trade in spices, NR, etc 1500 to 1800 • Commodity integration grew slowly (a little over 1%/annum) • Different trade from today- not competing, not substitutes • Mainly spices, silk, silver, slaves (sugar and cotton) • Commodities with a high rate of value compared to weight and bulk • From 1720 to 1780 international trade doubles in value • 1780 to 1840 international trade increases threefold 1884-1914 • 1848- unified world is not generally known • 1870-1914- some argue world economy was more integrated than it is today • Past integration was shallower • Current deeper integration is organized primarily within MNC production networks New Elements 1) Technological • Communications (internet, cell phone, fax) • Transportation (air trave)- things and people can move quickly. This has reduced barriers and the friction of distance 2) Markets • Millions of dollars can move around the globe instantly and electronically...
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- Spring '10
- International Trade, Physical Capital, world merchandise trade