Globalization for saturday

Globalization for saturday - Introduction Two eras of...

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Introduction: Two eras of globalization were witnessed for the past two centuries. Nayyar (2006) defines globalization as “a process associated with increasing economic openness, growing economic interdependence and deepening economic integration in the world economy”. This question seeks to compare and contrast the main features of globalization in the nineteenth and twentieth, and examine the extent to which the 2008 crisis and recession brought about ‘deglobalisation’. Features of the 19th and 20th centuries The following five headings identify the similarities and differences between the two eras. Finance Previously countries limited the amount of currency and capital firms move or trade outside a particular economy (Hardy 2010). Nayyar (2006) stated “In the last quarter of the nineteenth century, capital flows were a means of transferring investible resources to underdeveloped countries or newly industrialising countries with the most attractive growth opportunities. A century later, these capital flows were destined mostly for the industrialised countries which have high deficits and high interest rates to finance public consumption and transfer payments rather than productive investment.” This explains a difference between the two eras, the nineteenth century capital flow occurred in developing countries or in countries where there were growth opportunities, however in the twentieth century, capital flow to industrialised countries. Investment Investments were different in both the centuries, as (Nayyar 2006) identified the following in his writing. In 1914, the stock of long-term foreign investment in the world economy distribution identified a closer relationship; the industrialised world had 55 percent and 45 percent in the underdeveloped world. In 2000 however, the stock of foreign direct investment in the world economy was distributed in a more uneven manner. The industrialised countries had 66 percent and 32 percent in the
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developing countries. In 2000 industrialised countries absorbed 82 percent of the
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This note was uploaded on 04/05/2011 for the course MANAGEMENT 101 taught by Professor Vinod during the Spring '11 term at GCTS - Charlotte.

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Globalization for saturday - Introduction Two eras of...

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