GROUP 1

WHAT IS ECONOMIC GLOBALIZATION?

● a historical process
representing the result of
1980
human innovation and
technological progress
42.1 %
● characterized by the
increasing integration
of economies around
2007
the world through the
movement of goods,
62.1%
services and capital
across borders
INTERNATIONAL TRADING SYSTEMS

SILK ROAD WHEN DID IT REALLY BEGAN?

● used regularly from
130 BCE until 1453
BCE 1571:
Establishment of the
*galleon trade that
connected Manila and
Acapulco
*mercantilism/commercialism
- a system in which a country attempts
to amass wealth through trade with
other countries, exporting more than
it imports and increasing stores of
gold and precious metals.
THE GOLD
STANDARD HOWEVER!

● emerged in 1867
adapted by US and
other European
nations

Reason?
● to create a common
system that would allow
more efficient trade
and prevent the
isolationism of the
mercantilist era
THE GREAT DEPRESSION
● global economic
crisis in 1920s LED TO ADAPTING
FIAT
until 1930s CURRENCIES

● the worst and ● not backed by

longest recession precious metals and
the western world whose value is
experienced determined by their
cost relative to
other currencies

● allows governments to
freely and actively
manage their
economics
BRETTON WOODS SYSTEM

● created in 1944, in
Bretton Woods, New
Hampshire Goal
● to create an efficient
foreign exchange system,
prevent competitive
devaluations of
currencies, and promote
international economic
● replaced the gold growth.
standard with the
US dollar as the
global currency
 INTERNATIONAL WORLD BANK
MONETARY FUND (IMF)

● monitor exchange rates ● established to provide

and lend reserve assistance to countries
currency to nations that had been physically
that needed it to and financially
support their devastated by World War
currencies and settle II.
their debts
1971: 1973
● a temporary suspension of ● the stock markets
the dollar’s convertibility crashed
into gold was declared due
to insufficient gold supply
to cover the number of
dollars in circulation

STAGFLATION

● decline in economic
growth and employment
takes place alongside a
sharp increase in prices
NEOLIBERALISM

● essentially about making

trade between nations
easier

● is about freer movement of

goods, resources and ● 1980s onward -- became the
enterprises to maximize codified strategy of the
profits and efficiency US Treasury Department,
World Bank, IMF, and World
Trade Organization to
continue reduction under
the GATT
WASHINGTON CONSENSUS

● a set of free-market economic
policies intended to help
developing countries that
faced economic crises
Dominated global
economic policies
from 1980s until
early 2000s

● recommend structural reforms

that increased the role of
market forces in exchange for
immediate financial help
i.e free-floating exchange
rates and free trade
 THE GLOBAL FINANCIAL CRISIS AND
THE CHALLENGE TO NEOLIBERALISM
The ideal outcomes
predicted by
economists are not met
● disparities in wealth and
income increased
● poverty increased
● nations following IMF
prescriptions did not
prosper
● The gap between rich and
poor has increased
 causes of the crisis
the name commonly given ● formation of a
THE GREAT to the 2008 – 2009 housing bubble
RECESSION financial crisis that
● ensuing subprime
affected millions of
mortgage crisis in
Americans
the US economy
In their attempt to
promote the free
market, government
authorities failed to
regulate bad fundamental causes
investments occuring in failure financialization
●●● ensuing of transforming
the rise of the
US housing market economies
of the world from extensive-
economy
neoliberalism
● production to intensive-
global instabilities
production in the
witnessed
neoliberal era
PROS
● Promote economic growth
● Enhance quality of life
● Promote technological
exchange
● Improves literacy
● Improves life
expectancy
CONS
● Exploitation of workers
in less developed
countries
● Cause unfair
competition in
international trades
● Widens inequality
● Widens the gap between
the rich and poor
 끝
THANK YOU