CHAPTER II:

THE STRUCTURES OF
GLOBALIZATION
 THE STRUCTURES OF
GLOBALIZATION
SOCIAL ECONOMIC

POLITICAL
 THE STRUCTURES OF
GLOBALIZATION
SOCIAL ECONOMIC
A measure of how easily information and
ideas pass between people in their own
country and between different countries
(includes access to internet and social
media works)

POLITICAL
 THE STRUCTURES OF
GLOBALIZATION
SOCIAL ECONOMIC
A measure of how easily information and
ideas pass between people in their own
country and between different countries
(includes access to internet and social
media works)

POLITICAL
The amount of Political
co-operation there between
countries
 THE STRUCTURES OF
GLOBALIZATION
SOCIAL ECONOMIC
A measure of how easily information and
ideas pass between people in their own
country and between different countries The countries that trade with
(includes access to internet and social many others and few trade
media works) barriers are economically
globalized .

POLITICAL
The amount of Political
co-operation there between
countries
IS ECONOMIC GLOBALIZATION A
NEW PHENOMENON ?
CONVERGENCE vs. DIVERGENCE
 CONVERGENCE vs. DIVERGENCE

• Divergence - is when the value of an asset ,

indicator or index moves , the related asset ,
indicator or index moves in the other direction or
away from each other . This is what is referred to
as divergence . Divergence warns that the
current price trend may be weakening and in
some cases may lead to the price changing
direction .
 CONVERGENCE vs. DIVERGENCE

• Convergence - the term convergence is the

opposite of divergence . It is used to describe
the phenomenon of the futures price and the
cash price of the underlying commodity , moving
closer together over time . In most cases ,
traders refer to convergence as a way to
describe the price action of a futures contract .
 INTERNATIONAL MONETARY SYSTEM
( IMS )
• It is a set of internationally agreed rules ,
conventions and supporting institutions that facilitate
international trade , cross border investment and
generally the reallocation of capital between states
that have different currencies .

• It refers to the operating system of the financial

environment , which consists of financial institution,
multinational corporations and investors .
The role of International Monetary System (IMS) in Globalization :

The IMF seeks to mitigate the negative effects of globalization on the

world economy in two ways ;
1. By ensuring the stability of the international financial system , and
2. By helping individual countries take advantage of the investment
opportunities offered by international capital market , while reducing
their vulnerability to adverse shocks or changes in investors
sentiment .
GOLD STANDARD
• The gold standard was a system
under which nearly all countries
fixed the value of their currencies
in terms of a specified amount of
gold , or linked their currency to
that of a country which did so .

• A gold standard is a monetary

system of the governement links
the value its paper money to a
stock of golds reserve . Under a
gold standard the government
defines the dollar the specific
weight of gold .
THANK YOU