THE GLOBALIZATION

OF ECONOMIC
RELATIONS
By Istvan Benczes
ECONOMIC
GLOBALIZATION
✔ (IMF, 2008) a historical process, the result of human
innovation and technological progress.
✔ It refers to the increasing integration of economies around the
world, particularly through the movement of goods, services
and capital across borders.
✔ The term sometimes also refers to the movement of people
(labor) and knowledge (technology) across international
borders. 2
ECONOMIC
GLOBALIZATION
✔ Dimensions:
1. Globalization of trade of trade of goods and services
2. Globalization of financial and capital markets
3. Globalization of technology and communication
4. Globalization of production

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Economic Globalization vs
Internationalization
✔ Economic Globalization ✔ Internationalization
○ ‘functional integration’ ○ Extension of economic
between internationally activities of nation-
dispersed activities states across borders
○ Qualitative ○ Quantitative change
transformation

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Is Economic Globalization a
New Phenomenon?
✔ No single definition of globalization
✔ No consensus on its origin
✔ Frank & Gills
✔ Adam Smith

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Convergence vs Divergence
✔ Convergence ✔ Divergence
○ Ability to foster ○ Failed to reduce
universal economic absolute and relative
growth and poverty
development ○ WB claims that
○ Benefited from globalization indeed
openness reduce poverty but does
not benefit all nations
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Convergence vs Divergence
✔ Structuralism
o North and South are in a structural relationship to one
another
o Capitalism reinforces the structural patterns of
unequal change
o Underdevelopment – consequence of colonialism and
imperialism
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IMS & The Gold Standard
✔ IMS (Int’l Monetary
System)
○ Refers to the rules,
customs, instruments,
facilities and
organizations for
effecting int’l payments,
✔ The Gold Standard
○ Gold Mono-Metallism
(UK, 1821)
○ European Nations & US
– propagated a
deliberate shift to gold
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European Monetary Integration
✔ OEEC – Organization for European Economic Community
✔ OECD – Organization for Economic Cooperation and
Development
✔ EEC – European Economic Community (1957)
✔ EMS – European Monetary System (1979)
✔ EMU – European Economic Union (1992)
✔ ECB – European Central Bank (1999)
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Int’l Trade & Trade Policies
✔S

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Unilateral Trade Order
✔S

11
Multilateralism: From GATT to
WTO
✔S

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Developing Countries and Int’l
Trade
✔S

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