Send the link below via email or IMCopy
Present to your audienceStart remote presentation
- Invited audience members will follow you as you navigate and present
- People invited to a presentation do not need a Prezi account
- This link expires 10 minutes after you close the presentation
- A maximum of 30 users can follow your presentation
- Learn more about this feature in our knowledge base article
Do you really want to delete this prezi?
Neither you, nor the coeditors you shared it with will be able to recover it again.
Make your likes visible on Facebook?
You can change this under Settings & Account at any time.
World Economy Lecture 2
Transcript of World Economy Lecture 2
as a consequence of free trade agreements
Diminishing costs of production
Instruments of the state
Role of the state
(GDP, GNP, GDP per capita) vs.
is the process by which the government, central bank, or monetary authority manages the supply of money, or trading in foreign exchange markets
--> increases the total supply of money, by
lowering interest rates
--> decreases the the total supply of money, by
increasing interest rates
(Chase-Dunn, Kawano, Brewer 2000)
is a large axial division of labor with multiple political centers and multiple cultures
contemporary international economic system is more closely integrated than in any previous era
. The global financial crisis that began in 2008 provides a clear illustration of the relationship between
trade, finance, international institutions
, and the difficulties that governments fave in coping with the problems generated by
(trade between national economies, interconnectivity)
(transnational flows of capitak and other resources, foreign investments, MNCs, Bretton Woods world economy)
World Economic System
Multinational Companies (MNCs)
- ‘Effective and legitimate governance requires agreement on the purpose of the international economy’
various markets ( e.g. financial, labour, trade) - various approaches (e.g. laissez-fair, regulated)
Growing income inequality
High chronic levels of
(esp. developed countries like Western Europe)
(e.g. Spain 40%, 'lost generation', NEETs!!!)
Unregulated international financial flows
(with negative consequences on national economies) -->
'RACE TO THE BOTTOM'
'Reasonable estimates say that the
Transatlantic Trade Partnership (TPP)
could boost the annual world output by
The Economist, 22nd February 2014
: price stability, full employment and economic growth
the actions of a government in setting the level of public expenditure and how that expenditure is funded.
Expansionary fiscal policy
- increase in government purchases of goods and services, and/or decrease in net taxes.
Contraction fiscal policy
- decrease in government purchases of goods and services, and/or increase in net taxes
Neutral fiscal policy
- no intention of affecting economic activity y
Taxes are applied to
corporate income --> debate on their effectiveness
- basic functions (e.g. defense and law enforcement) (
) - individual welfare is sourced in the multiplication effects of private economic activity
- welfare and 'stimulative' functions beyond the basic ones (e.g. infrastructure development, research and education, social protection) -
debate on the need for '
World Economic System
: Components and Inter-dependencies
government policy controlling foreign trade
Free trade policy
Protectionist trade policy
: tariffs, non-tariff barriers: import quotas, export subsidies, national procurement, voluntary export restraints, national procurement, red-tape barriers