Globalization of the world economy

A globalizing world provides opportunities and challenges to nations and people in the world.
Flow of goods and services Flow of labor and jobs Flow of financial instruments, currency
First period (1870-1914) Second period(1945-1980) Third period(1980 – now)
As results from industrial revolution Fueled by improvements in
and ended with breakout of the first Dismantling of heavy trade telecommunications and
world war protection led to rapid increase in transportation
Increased production – increased international trade.
foreign investments – immigrants Elimination of restrictions on capital
flows led to massive international
capital movements
Anti-Globalization Movement : globalization sacrifices human and environmental well-being for profits of
multinationals
World poverty Job losses and lower wages in rich Environmental pollution and climate
child labor in poor countries countries change

international Trade and the Nation’s Standard of Living

Interdependence : Economic relationship among nations measured as ratio of a nation’s imports and exports of
goods and services to GDP
Much larger for smaller industrial and developing countries than for United States
Sources of potential gain for nation
Access to items with limited Access to lower cost products Access to greater product variety
availability domestically (such as
coffee, petroleum and copper)