1. Development of the regions of the world economy Economic Geography I. International Business bachelor study programme (BA) Spring term 2015/2016. CUB Centre of Economic Geography and Futures Studies dr. Jeney László Senior lecturer jeney@elte.hu

2. 2 Definition and characteristics of world economy

3. 3 Evolution and actors of world economy Modern world economy developed by a long historical evolution Modern world economy developed by a long historical evolution The appearance of world market: The appearance of world market: 15 th –16 th century (at the Age of Discovery): the appearance of only the world market 15 th –16 th century (at the Age of Discovery): the appearance of only the world market 18 th –19 th century (at the age of classical capitalism): the appearance world economy 18 th –19 th century (at the age of classical capitalism): the appearance world economy –At the same time with the apprearance of national economy –The essence is derived from the capitalist social formations A system with more actors A system with more actors 1.National economies: oldiest actors 2.Transnational companies (tnc) 3.International organizations: newest actors

4. 4 Similar concepts World economy > aggregate of national economies World economy > aggregate of national economies –Internationalization of forces of production –More effective allocation of resources –Global problems can be solved only on this level (more and more questions arises what should be internationally dealt) –Processes of world economy determines the ones of national economies World economy > world market (  only the interactions among the national economies) World economy > world market (  only the interactions among the national economies) World economy < world system (  system of ethnical, cultural, military relations as well) World economy < world system (  system of ethnical, cultural, military relations as well)

5. 5 Universality but diversity A world-wide economic unit of the mankind A world-wide economic unit of the mankind –Even if hundred millions don’t integrated to the circulation –False statement: coexistence of a capitalist and a socialist world economies and world markets –Unified world market: connects with similar relations systems with different development Main character of the contemporary world economy: diversity Main character of the contemporary world economy: diversity –Lowest 25% of the countries: GNP per capita < 500 $ –Highest 10% of the countries: GNP per capita > 20000 $ –Informational society (internet)  caravan routes –(Post-)modern  traditional pre-capitalist organizations –Conflicts instead of peaceful coexistence GDP of the countries of the World (on ppp), 2015. Source: Worldmapper

6. 6 Main characteristics of the global core–periphery relationship

7. 7 Wallerstein: theory of core– periphery Wallerstein: new theoretical system: world economy forms an organic whole Wallerstein: new theoretical system: world economy forms an organic whole Determined socio–economic structure Determined socio–economic structure –The extreme poles: cores and peripheries –Core: action centre of fields, growth poles, hegemonic country at the top (West-Eu, USA, Japan) –Semi-Periphery: on the inner margin –Periphery: on the outer margin Rostow, Friedman: theory of economic growth Rostow, Friedman: theory of economic growth

8. 8 Historically changing cores and peripheries Cores and peripheries existed even before the appearance of the world economy (classical capitalism) Cores and peripheries existed even before the appearance of the world economy (classical capitalism) –But: the achievement of the relationship only later Historically changing, but reproductive shaped  not predestination Historically changing, but reproductive shaped  not predestination –More core appeared and disappeared along the history (e.g. Egypt, Mesopotamia) –The catching-up was successful by more peripheries (e.g. North America, Japan, Southeast Asia)

9. 9 Historically changing cores and peripheries The falling behind means other results at different ages The falling behind means other results at different ages –Being Core or Peripehery matters since the evolution of the formation of capitalist production, the world economy (since then it became important) Core–periphery relationship evolved in more dimensions: economic and political  determines the international factors of trade Core–periphery relationship evolved in more dimensions: economic and political  determines the international factors of trade Asymetric mutual interdependence Asymetric mutual interdependence –Mutual: action centre and gravity zone: different efficiency advantages  specialization of national economies  world wide specialization –Asymmetric: the extents of dependence, advantages of specialization are not equal

10. 10Core–periphery Power of Core derives from its higher development Power of Core derives from its higher development –Its interest: the establishment of the asymmetric dependence (e.g. military, assimilation, trading relations) Core–periphery relationship: connection of the power centres evolved in large economic macroregions and their gravity zones Core–periphery relationship: connection of the power centres evolved in large economic macroregions and their gravity zones Characteristic economic macroregions: America, Europe– Africa, Far East Characteristic economic macroregions: America, Europe– Africa, Far East –The relations of the action centres to each other is also changing  the spatial structure/pattern of world economy also changes

11. 11 Economic geographic division of the World Classic – 5 continents (Europe, Asia, America, Africa, Australia-Oceania) Classic – 5 continents (Europe, Asia, America, Africa, Australia-Oceania) World economic position: 2 (Brandt line: North and South) or 3 units (Core, Semi-Periphery, Periphery) World economic position: 2 (Brandt line: North and South) or 3 units (Core, Semi-Periphery, Periphery) Macroregions of the world economy – 3 units: America, Europe-Africa, Far East Macroregions of the world economy – 3 units: America, Europe-Africa, Far East Cultural regions Cultural regions World economic position Macroregions of the world economy AmericaEurope-AfricaDebatedFar East CentreNorth AmericaEuropeAustralia  East Asia Semi- Periphery Latin AmericaIslamic WorldSoutheast Asia PeripheryTropical AfricaSouth AsiaNorth and Inner Asia

12. 12 Economic core regions Other definitions: Other definitions: –Global North –Triad (North America, Europe, East Asia) + Australia Appearance as core region: Appearance as core region: –Europe: from the Age of Discoveries and the industrial revolution –North America, Australia: from the late 19 th century –Japan: from the 1960s (famous ancient East Asian cultures) Its state of development: in the forefront of the age Its state of development: in the forefront of the age Its development is autonomic and organic Its development is autonomic and organic –Self-modernization: derived from the inner structure and the inner motivation of the society –Recognition of natural and human rules  getting the new resources  ensure a more higher state of satisfaction of needs

13. 13 Economic peripheries Falls behind the state of development of Core Falls behind the state of development of Core Does not move on an organic and autonomic pathway Does not move on an organic and autonomic pathway Periphery: lagging structure  dependent position, acceptance of asymmetric relations Periphery: lagging structure  dependent position, acceptance of asymmetric relations –Delinking from the world is not alternative –Its development based on copy of more developed systems evolved under other circumstances copied  following samples Question: are the copied samples able to be organic, to dynamize the whole structure? Question: are the copied samples able to be organic, to dynamize the whole structure?