Introduction Land area and population Income Income per capita International trade The balance of payments Dynamics and globalization Trade connections in the world economy Conclusions CHAPTER 1; THE WORLD ECONOMY International Trade & the World Economy;  Charles van Marrewijk

Introduction Land area and population Income Income per capita International trade The balance of payments Dynamics and globalization Trade connections in the world economy Conclusions CHAPTER 1; THE WORLD ECONOMY International Trade & the World Economy;  Charles van Marrewijk

Introduction International Trade & the World Economy;  Charles van Marrewijk International economics distinguishes between: International monetary analysis International real analysis International Trade & the World Economy focuses on real analysis. Chapter 1 The World Economy discusses some key economic concepts, focusing on ‘important’ countries.

Introduction Land area and population Income Income per capita International trade The balance of payments Dynamics and globalization Trade connections in the world economy Conclusions CHAPTER 1; THE WORLD ECONOMY International Trade & the World Economy;  Charles van Marrewijk

Land area and population International Trade & the World Economy;  Charles van Marrewijk

Land area and population International Trade & the World Economy;  Charles van Marrewijk

Introduction Land area and population Income Income per capita International trade The balance of payments Dynamics and globalization Trade connections in the world economy Conclusions CHAPTER 1; THE WORLD ECONOMY International Trade & the World Economy;  Charles van Marrewijk

Income International Trade & the World Economy;  Charles van Marrewijk To measure the value of all goods and services we distinguish: GDP = Gross Domestic Product (located in a country) GNP = Gross National Product (residents of a country) GDP + net receipts of factor income = GNP To correct for the large differences in prices between countries (especially for non-traded goods and services) the United Nations International Comparison Project calculates: Purchasing Power Parity exchange rates

Income International Trade & the World Economy;  Charles van Marrewijk GNP and GDP

Income International Trade & the World Economy;  Charles van Marrewijk

Income International Trade & the World Economy;  Charles van Marrewijk GNP in current $ and PPP $

Introduction Land area and population Income Income per capita International trade The balance of payments Dynamics and globalization Trade connections in the world economy Conclusions CHAPTER 1; THE WORLD ECONOMY International Trade & the World Economy;  Charles van Marrewijk

Income per capita International Trade & the World Economy;  Charles van Marrewijk

Introduction Land area and population Income Income per capita International trade The balance of payments Dynamics and globalization Trade connections in the world economy Conclusions CHAPTER 1; THE WORLD ECONOMY International Trade & the World Economy;  Charles van Marrewijk

International trade International Trade & the World Economy;  Charles van Marrewijk

International trade International Trade & the World Economy;  Charles van Marrewijk Exports relative to imports

International trade International Trade & the World Economy;  Charles van Marrewijk The value of exports can exceed the level of GDP

Introduction Land area and population Income Income per capita International trade The balance of payments Dynamics and globalization Trade connections in the world economy Conclusions CHAPTER 1; THE WORLD ECONOMY International Trade & the World Economy;  Charles van Marrewijk

The balance of payments International Trade & the World Economy;  Charles van Marrewijk

Introduction Land area and population Income Income per capita International trade The balance of payments Dynamics and globalization Trade connections in the world economy Conclusions CHAPTER 1; THE WORLD ECONOMY International Trade & the World Economy;  Charles van Marrewijk

Dynamics and globalization International Trade & the World Economy;  Charles van Marrewijk Current account surplus (% of GDP) indicator of accumulation of financial claims on the Rest Of the World (ROW).

Dynamics and globalization International Trade & the World Economy;  Charles van Marrewijk World GDP increases faster than world population

Dynamics and globalization International Trade & the World Economy;  Charles van Marrewijk World exports increase faster than world GDP

Introduction Land area and population Income Income per capita International trade The balance of payments Dynamics and globalization Trade connections in the world economy Conclusions CHAPTER 1; THE WORLD ECONOMY International Trade & the World Economy;  Charles van Marrewijk

Trade connections in the world economy International Trade & the World Economy;  Charles van Marrewijk

Introduction Land area and population Income Income per capita International trade The balance of payments Dynamics and globalization Trade connections in the world economy Conclusions CHAPTER 1; THE WORLD ECONOMY International Trade & the World Economy;  Charles van Marrewijk

Conclusions International Trade & the World Economy;  Charles van Marrewijk ‘Importance’ of countries varies with measure used: Land areaRussia, China, Canada PopulationChina, India, USA GDP/GNP, current $USA, Japan, Germany GDP/GNP, PPP $USA, China, Japan Import/exportUSA, Germany, Japan/UK Surplus current account = net capital outflow GDP increases faster than population Exports increase faster than GDP Trade flows have local character Trade flows mainly between high income countries