1. 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

3. 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

4. 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.

5. 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

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

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

8. 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

9. 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

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

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

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

13. 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

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

15. 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

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

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

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

19. 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

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

21. 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

22. 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).

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

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

25. 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

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

27. 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

28. 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