Global Economy

Global economy can be defined as the sum of activities that take

place both within a country and between different countries. Each
country is a separate unit, with its own industrial production, labor
market, financial market, resources and environment.
These include international trade in goods and services, the
international flow of financial capital, investments by
multinational corporations and migration of workers.
 Market Integration
Market integration occurs when prices among different
locations or related goods follow similar patterns over a along
period of time. Groups of goods often move proportionally to
each other and when this relation is very clear among different
markets it said that the markets are integrated. It is a
situation in which separate markets for the same product
become one single market.
For example, when an import tax in one of the markets
is removed; it has long been recognized that market
integration is more efficient than firm integration.
Global Interstate System
The theory of the interstate system holds that all states are
defined through their relationship to other states or through
participation in the world economy, and that divisions between
states help to divide the world into a core, periphery and semi-
periphery.
Global interstate system is important because the
balance of power in the interstate system prevents any single
state from controlling the world economy, and from imposing a
political monopoly over accumulation. This means that the
“factors of production” cannot be constrained to the degree that
they could be if there where an overarching world state.
 Contemporary Global
Governance
It is to provide global public goods, particularly peace and security,
justice and mediation system for conflict, functioning markets and
unified standards for trade and industry.
Example include financial market regulation through the
bank for International Settlements and the guidelines for
multinational enterprises set by the Organization for Economic
Cooperation and Development (OECD).
Rowena D. Amandra
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