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The Growth of Globalization  Since the end of WWII, world trade has grown much faster than world output  Openness Index = (Exports + Imports)/GNP  The.

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Presentation on theme: "The Growth of Globalization  Since the end of WWII, world trade has grown much faster than world output  Openness Index = (Exports + Imports)/GNP  The."— Presentation transcript:

1 The Growth of Globalization  Since the end of WWII, world trade has grown much faster than world output  Openness Index = (Exports + Imports)/GNP  The index is a measure of trade  Since 1945 (over 64 years)  (Exports + Imports) > GWP  GNP = gross national product  GWP = gross world product

2 Openness Index for select nations over time graph taken from James Gerber, 2008, International Economics, 4th Edition, Pearson Education

3 The U.K., and the European Continent have traditionally been open nations  The Dutch international trade patterns have traditionally been leading others  Traditional Dutch flower auctions  Engines  Services  Processing & packaging produce  Amsterdam & other import/export centers

4 France and Germany  French agriculture -- processing o But “common agricultural policy” import protection --- is a contention in World trade Organization negotiations  German engineering & manufacturing  Movement to common market  Western market relative to the Russian market – do East European nations go west or go to Russia?

5 Japanese export expansion  Export expansion policies and exchange rate policy  Imports come into Japan primarily via state import houses -- import restrictions  Efficient manufacturing to reduce cost of exports to other nations

6 China and other Asian nation export expansion policies China -- exchange rate policy and export expansion policies --- manufacturing Taiwan – export expansion policies and manufacturing efficiency Singapore – the “city state” --- assembly and manufacturing center Malaysia – textiles, synthetics Hong Kong – trade center --- HK has their own currency separate of the PRC

7 The U. S.  Not really an open trade state until the close of the gold window in 1973  The big market --- so imports loom large  FDI – foreign direct investment by U.S. firms  U. S. agriculture now an exporting force  Inputs come in from all over the world to U.S. manufacturing  Isolationist and high tariff policies during the 1930’s – 1950’s

8 Issues in the international economy TRADE DEFICITS TRADE DEFICITS REGIONAL TRADE AGREEMENTS REGIONAL TRADE AGREEMENTS RESOLUTION OF TRADE CONFLICTS RESOLUTION OF TRADE CONFLICTS GAINS FROM TRADE – DEVELOPED VS. DEVELOPING NATIONS GAINS FROM TRADE – DEVELOPED VS. DEVELOPING NATIONS THE ROLE OF INTERNATIONAL INSTITUTIONS THE ROLE OF INTERNATIONAL INSTITUTIONS EXCHANGE RATES & THE MACROECONOMY EXCHANGE RATES & THE MACROECONOMY FINANCIAL CRISES FINANCIAL CRISES CRISES & REFORM IN LATIN AMERICA CRISES & REFORM IN LATIN AMERICA DEBT & CAPITAL FLOWS DEBT & CAPITAL FLOWS EXPORT EXPANSION EXPORT EXPANSION CHINA & INDIA COME TO TOWN CHINA & INDIA COME TO TOWN WHAT OF THE EASTERN EUROPEAN NATIONS? WHAT OF THE EASTERN EUROPEAN NATIONS? WHAT ABOUT RUSSIA WHAT ABOUT RUSSIA WHAT’S TO BECOME OF THE ENVIRONMENT & THE RULE ON NATURAL RESOUCES? WHAT’S TO BECOME OF THE ENVIRONMENT & THE RULE ON NATURAL RESOUCES?


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