...THE GLOBAL ECONOMY FEATURES OF THE GLOBAL ECONOMY Nature of the global economy and globalisation The global economy/world economy consists of all the countries of the world that contribute to gross world product through the production of goods and services. It is often discussed in relation to the increased integration of economies. Gross world product (GWP)/world GDP is the sum of the total output of goods and services by all economies over a given period of time. It is measured at purchasing power parities (PPP) which adjust exchange rates to equalise the price of identical goods and services across economies. Globalisation is the increasing integration of countries and their economies, resulting in the increased impact of international influences on all aspects of life and economic activity. The economic indicators of globalisation include: * international trade flows * international investment and transfers of technology * international finance * international labour markets Trade: * Greater growth but with greater volatility than GWP * Growth of world trade has been around twice growth of real GWP since the 1970s, but contractions in the growth of world trade have also been more severe (World Economic Outlook, IMF, 2009) * Greater growth in developing and emerging economies * Exports from developing and emerging economies grew 9.8% from 2002 to 2008 cf. 5.2% growth in developed economies ...
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...The economy of Ukraine and Ukraine in the global economy Petrusha Helena Ukraine’s economy has a great potential to perform successful in the world. It can be characterized by such strong sides: - well educated labour force, - large domestic market, - well developed industrial base, - access to a variety of resources, including some of Europe’s best best agriculture land, significant coal and some oil and gas reserves, - strategic location connecting Europe, Russia and Asian markets. Nevertheless, Ukraine ended up among the least successful transition economies. The reasons for such a poor performance are different, but we should emphasize on the weaknesses deriving from overcentralised command economy during the Soviet period. I’d like to draw your attention to the Ukraine economy past in order to understand its current situation. Large and often inefficient state-owned factories, enterprises and collective farms wasted resources and emphasized quantity over quality. Prices were fixed and consumer goods were often in short supply. Excessive spending on the military hurt the civilian economy. For the last decades Ukraine is moving to market economy, where the forces of supply and demand and private ownership guide the allocation of resources. The transition to market economy is politically and socially difficult because of experience of rising inflation, unemployment and economic uncertainty before the long term benefits of market economy. The next point of this...
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...India is regarded as the world’s richest country in the world and had the world’s largest economy till the 17th century AD in this book. He also had calculated the historical statistic of world’s largest GDP that by 2030 India 2030 India will have 10,074,000 million and China 22,983,000 million since it was resource rich but the actual figure of India’s Gdp in 2014 is worth 2066.90 billion us dollars which is only 3.33 percent of the world economy and China was worth 1036.10 billion US dollar which is only 16.71 percent of the world’s economy as against what Angus had predicted. Even in today’s age colonialism in the garb of imperialism which exploits natural resources because capitalism does not respect it as much as capitalistic labour. This is seen in Africa where resource rich countries are facing resource curse. This paper will elucidate two examples from contemporary history about the scant respect for natural resources on its owners. Sierra...
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...Impact of Housing Market Crash “The Impact of housing Market Crash on Global Economy” The housing market in the United States became a nightmare for many people who had taken out loans found and they were not able to pay their mortgage repayments. When the value of homes decreased, the borrowers realized themselves with negative capital. The negative movement of housing sector did effect the United States economy. Individual house owners and investors could not react to the situation and their properties lost value. Rates of mortgages increased extremely high that’s why mortgages no longer became affordable for many people, and thousands of mortgages defaulted. Many banks and investment organizations start have difficult time finding money due to massive losses in mortgage. This also caused slow down the housing market, growth of new home building and putting many people in unemployment environment. Depressed housing prices made many homes worth much less than the mortgage value therefore some owners chose just walk away instead of pay their mortgage. The housing sector is one of the most important chains in the economy. After the housing market crash, the economy could not run as usual because this chain had a big impact in the United States economy. Therefore the other fields and sectors ruined by the circumstances. Briefly, the domestic crisis started to change the consumer behaviors. People reduced their spending and that effected the volume of the...
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...The world economy has changed greatly since the beginning of man. As a species we evolved each generation socially and especially economically. In the caveman days we traded basic things for food. An example of a trade would be wood for food. As we evolved we then developed a currency system trading gold or silver for items. Today the whole globe has a base economy and every nation is involved in the world economy. Economic globalization refers to the intensification and stretching of economic interrelations across the globe. Gigantic flows of capital and technology have stimulated trade in goods and services. Markets have extended their reach around the world, in the process creating new linkages among national economies. The world economy was developed by the emergence of the global economic order, internationalization of trade and finance, the power of transnational corporations, and the enhanced role of international economic institutions. The economy of the world really started to become internationalized after World War 2. There was an economic conference held in New England to help develop the new international economic order. Under the leadership of the United States and Great Britain, the major economical powers of the time in the north, both countries decided to reverse their protectionist policies of the interwar period. The countries at the meeting all arrived at a firm commitment to expand international trade, the participants at the conference also agreed to...
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...Introduction This report will examine the world economy in general these issues. In this way, people can learn basic information about the world economy. Also global economy can be seen as the economy of global society and national economies – as economies of local societies, making the global one. It can be evaluated in various kinds of ways. It is inseparable from the geography and ecology of Earth, and is therefore something of a misnomer, since, while definitions and representations of the "world economy" vary widely, they must at a minimum exclude any consideration of resources or value based outside of the Earth. This report would talk about several definition would used during the world economy. Finding 1. Free trade Free trade is the interchange of goods and services (but not of capital or labor) unhindered by high tariffs, nontariff barriers (such as quotas), and onerous or unilateral requirements or processes (businessdictionary, 2015). The North American Free Trade Agreement is an agreement signed by Canada, Mexico, and the United States, creating a trilateral rules-based trade bloc in North America. U.S. exports to Canada and Mexico support more than three million American jobs and U.S. trade with NAFTA partners has unlocked opportunity for millions of Americans by supporting Made-in-America jobs and exports(businessdictionary, 2015). As the U.S.’ two largest export markets, Canada and Mexico buy more Made-in-America goods and services than any...
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...| Has Market Economy approach led the world to the current economic situation? | | | | By:Divya Padmanabhan IES Management College and Research Centre Mumbai, India | Executive summary: “If war is God’s way of teaching geography to the world, recession is His way of teaching everyone a little economics”. The global financial crisis has questioned the efficacy of the existing institutional framework and forced us to rethink on how our financial systems are regulated. It has also posed an important question whether the root cause of this global crisis has been the highly praised ‘Open Market Approach’. The inter linkages in the global economy has ensured that no country remains isolated and unhindered by the crisis. With the economic crisis looming over the people at large, unemployment seems to be at all time high and the whole world having a pessimistic view of the future, capitalism seems to be at loss of reason for this crisis, let alone a find solution for it. There was a time when being a capitalist economy was a matter of pride and people were excited to be part of the “free” economy but somewhere down the line the excitement seemed to have vanished. What was thought to be an epitome of equality, turned out to be the cause of inequality. In an article by Joseph E. Stiglitz “Of the 1%, By the 1%, For the 1%”, 1 percent of the people in USA take nearly a quarter of the nation’s...
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...The economy is the state of a country or region in terms of the production and consumption of goods and services and the supply of money. Economy is usually measured on a national scale and would incorporate the trade and services within a country; however this can also occur on an international scale which is known as globalisation. Transnational co-operations (TNCs) and Newly Industrialized Country (NICs) play a fundamental role in the interaction of economies worldwide (global economy). A TNC is a very large company that has offices and factories in many different countries, for example Nike. On the other hand, a NIC is a newly industrialized country such as Singapore, South Korea and Hong Kong (discovered in the 1970s/80s) and more recent NICs (discovered in the late 2000s) include China, India, Malaysia and Thailand. NICs are usually LEDCs that have undergone recent, rapid industrialisation and experience rising incomes, high growth rates and international involvement. Governments of these NICs kept close control over industrial development, and encouraged industries to export manufactured products to the more developed and richer countries abroad. The percentage of people working in the primary sector has declined as people move from jobs in rural areas to urban areas so that they can work in factories as the industrial base continues to develop. A ‘TNC’ is a company that operates in at least two countries. They often have management headquarters in their home country...
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...THE U. S. IN A GLOBAL ECONOMY >The chapter provides background for ongoing changes in the American economy that link it increasingly to economic events in the rest of the world Increasing Importance of Trade >[Instructor’s note: Trade patterns can be divided into two major types of exchanges: merchandise meaning goods which are tangible such as cars and chocolates and services meaning items which are intangible such as insurance or financial products] >Figure 1.1 shows the trend in U. S. merchandise trade flows from 1869 to 2007; exports and imports were constant at about 7% of GDP until falling during the post-World War I decades but recovered to historic rates in the 1950s until taking off at a rapid pace of increase in the 1970s -According to the Council of Economic Advisors merchandise exports were $1.3 billion or 9.1 % of GDP and merchandise imports were $2.1 billion or 14.8 % of GDP in 2008 -[Instructor’s note: according to the Bureau of Economic Analysis the merchandise exports and imports were 8.7% and 13.3% of GDP in 2010] -Two recent divergences between the two streams of exports and imports as a percentage of GDP were the post world war II years when the American economy ran a trade surplus vastly out-producing the rest of the world and the period since 1980 when we have run a persistent trade deficit in merchandise imports >The trend in both percentages has been steadily upward since 1970 marking the pace of globalization >Although some economists early...
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...1) GDP : A a. Consumption ( C ) is the largest component of GDP. b. In short term, the Consumption variation might be responsible for the fluctuations the economy suffers. c. G is the spending the overall taxes, common goods of the citizens of a given country. B a. The GDP is more steady, the industrial production fluctuates more. C a. GDP is important indicator of the health of a given economy, it serves on an internal level to monitor the effectiveness of spendings etc… and on an external level to choose good economic partners. It is also used to forecast and take decisions based on these forecast concerning to future needed investments. D a. GDP is about nationals and foreigners within the boundaries of a country. GNP is about citizens of a given country wherever they producing and consumming geographically. E a. The major component determining long run economic growth would be the deflator which takes into consideration the inflation/deflation, so mastering the inflation rate of a given economy makes its growth more steady and less prone to collapse. 2) Unemployment rate d. In economics Okun’s law states that it is empirically observed that 1% increase in unemployment rate will impact the GDP by -2% compared to the potential GDP. e. This relationship exists because GDP is directly linked to consumption which makes roughly 70% of it, and unemployed have less money to spend, so a lower consumption. 3) Inflation ...
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...Marketing in a Global Economy Assignment BUS 620 Managerial Marketing Timothy Malone December 23, 2013 Marketing in a Global Economy Assignment Italy represents the height of the coffee culture, “the gold standard against which all others are measured” (Faris, 2012). For Italians, their coffee is a cultural symbol. If Starbucks is serious about venturing into Italy, then they have a lot of work to do in order to promote their brand. However, the longer they stay out of the Italian market, the harder it will be for Starbucks to break ground. Global markets represent an opportunity for growth and development among many companies around the world. It “requires companies to extend and leverage their marketing skills, product-based competencies, and brand-specific advantages to adapt to consumer preferences in different parts of the world” (Finch, 2012, p. 392). Starbucks is a prime example of a company that has become successful in conducting business within the global economy. After an inspiring trip to Milan in 1983, Howard Schultz came up with the idea of Starbucks. With his new vision, Schultz believed that coffee could be more than just a drink; it could become an “experience” (Faris, 2012). Now, the once little Seattle based company is pushing into new territories faster than it can come up with a new coffee variation. Thompson and Arsel state, “The Starbucks revolution transformed gourmet coffee from a yuppie status symbol into a mainstream consumer good...
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...Final Paper “Corruption In global Economies” Submitted to: Dr. Bernard Walker PHI421: Applying Ethics to Organization March 11, 2009 Submitted by: Paleh Boye-Weah ID Number: 721260 Cohort: BHE-07 Corruption, according to Rose-Ackerman is a “symptom that something has gone wrong in the management of the state” (Rose-Ackerman, 1999, pg. 9) Corruption rains from top government officials to civil servants and citizens. It causes high level of poverty, as wealth is not equally distributed amongst the people of the nation. Corruption due to exploitation of a country’s natural resources or human labor causes limits on investment and others to suffer as a result of poor circulation of public wealth, and these unethical practices leads to a hurting economy. “The number and variety of countries suffering corruptions scandals in recent years underscore the fact that corruption differs widely in its forms, pervasiveness and consequences”. (Elliott, 1996, Pg.1) Corruption in third world countries reduces economic growth, slows down economic development, and there may also be less severity in developed countries as many may not feel the glitch of corrupt officials or any effect as to whether it is actually occurring. It also benefits the few at the expense of the many; it delays and distorts economic development, preempts basic rights and due process, and diverts services, international aid and the whole economic. (Johnston, 2005, pg. 1) Corruption...
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...MKTA 446 Marketing in a Global Economy By Elizabeth Fletcher Evangel University Degree Completion Program Cohort 34B May 8, 15, 22, 29 & June 5, 2008 Associate Professor Elizabeth Fletcher EMAIL: fletchere@evangel.edu Office Phone: 865-2815 ext. 8112 Business Department Chair (Suite AB107) "Marketing requires separate work, and a distinct set of activities. But, it is a central dimension of the entire business. It is the whole business seen from the point of its final result, that is, from the customer's point of view. Concern and responsibility for marketing must permeate all areas of the enterprise." Peter Drucker, Management Course Description This course provides the student an opportunity to understand the decision-oriented realm of marketing in modern profit and not-for-profit organizations. Through a broad introduction to marketing concepts, the student will gain an understanding of the roles and operations of the free enterprise, competitive market system in the American and world economies. Through exposure to the "language" common to marketing managers, the student's development of relationships with business entities, governments, and associations will be enhanced. Course Objectives The student is provided the opportunity to understand the fundamentals of marketing for applications in modern organizations. By the end of the course the student will be a more intelligent consumer and citizen. The student should develop an appreciation of marketing...
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...in the developing countries. In this journal, James analysed the relationships and effects between the developing countries’ economy development and the information technology. Firstly, from James (2001) point of view, there is a ‘cumulative causation’between foreign direct investment and exports and economic growth. Heclaimed that foreign direct investment (FDI) had a huge influence on the export performance of the developing countries, the degree of exports stimulates economy growth thus attract more FDI. There are some evidences exist to prove his claim. China isone of the good examplesto indicate that. Song and Zhang (2001) stated that there was a strong link between foreign direct investment and exports in China. Exports which generated by FDI had attracted more FDI into China. It also provided the evidence that only 1 percentage of FDI level changed in 2000 was related to 0.29 percentages rise in exports in 2001 (Song and Zhang). Moreover, foreign investment has played a vital role in both China’s economy and fast growth (Whalley&Xin, 2010). According according to Whalley and Xin (2010), their research result has shown that ‘China’s growth rate may have been around 3.4 percentage points lower in the past few years’ without FDI(Whalley&Xin, 2010). While on the other hand, this ‘cumulative causation’ application may be affected by current global situation. The export-led growth strategy for those least developed countries seem to be not so effective in recent years. According...
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...BMGT 110 China’s Global Economy Anthony Fleury Xinhua reported that Beijing recorded 80% blue sky days in the first quarter of 2009. The concept that there is a blue sky day is unusual for most of the world, but it represents the price that China has paid for its rapid economic growth trajectory. As cities sprout from villages and a labor force in the hundreds of millions is mobilized, China has experienced a double-digit GDP growth for much of the past thirty years. This growth however is under threat from several sources. The environmental consequences of growth are just one threat. China also faces chronic resource shortages – its industry does not want for coal but the Chinese people do struggle for things such as shortages of oil, food and clean water. The PRC also faces political tests as well, including Taiwan, Tibet and Xinjiang. Political tensions with the former could destabilize all of Asia if not the world. The tensions in the western part of China represent the social unrest that the Communist government’s march towards wealth has created. Even amongst Han, there is considerable disparity of wealth between regions and classes, and these disparities may very well threaten China’s future. This paper will analyze each of these critical issues in turn, and then synthesize the issues into an assessment for the future of China’s economic growth. All economies depend on resources for their growth. Output is determined by the availability of labor,...
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