SlideShare uma empresa Scribd logo
1 de 43
Extract
1
Economics of Globalisation and World Trade
Remember to refer clearly
to the pre-release data in
your final exam answers!
OCR F585 Economics – For June 2016
Pre-Release A2 Economics Case Study Toolkit from Tutor2u
Extract 1: Key Term Glossary
Key term Brief definition
Globalisation
A process of deeper economic integration and
interdependence between countries
Capital markets Markets for bonds (debt) and equities (shares)
Foreign direct investment (FDI) Inflows of capital from overseas including takeovers
Specialisation Specializing factor inputs in a certain task
Division of labour Breaking down production into smaller individual tasks
Comparative advantage
Comparative advantage refers to the relative cost
advantage that one country has over another
Economic efficiency Making optimum use of scarce factor inputs
Import tariffs Ad valorem taxes on the value of imported products
Absolute advantage
The ability to produce a product (good or service) at a
lower absolute unit cost
Globalisation is a process in which national economies have
become increasingly integrated and inter-dependent
The OECD defines globalization as
“The geographic dispersion of industrial and service
activities, for example research and development, sourcing
of inputs, production and distribution, and the cross-border
networking of companies, for example through joint
ventures and the sharing of assets.”
Trade to GDP ratios are
rising for most countries
Expansion of Financial
Capital Flows between
countries
Rising Foreign Direct
Investment and Cross
Border M&A
Rise of global brands –
including many from
emerging countries
Deeper specialization of
labour – i.e. components
from many nations
Global supply chains & new
trade and investment
routes
Selection of Important Aspects of Globalisation
Extract 1: Text and Commentary
• The closer links between the
world’s economies are seen in a
number of indicators.
• These include:
1. The value of trade in goods
and services as a percentage
of world GDP is increasing
2. Foreign Direct Investment
(FDI) as a percentage of world
GDP has increased six-fold
since 1980
3. The number of migrant
workers has trebled since the
1960s.
• Merchandise trade as a share of GDP
is the sum of exports and imports
divided by the value of GDP, all
expressed in current US$.
• This trade-to-global GDP ratio has
risen in the long term but has actually
been stable or declining gently in
recent years. (Source IMF)
• World trade-to-GDP ratio since 2006
• 2006: 47%
• 2008: 53%
• 2009: 43%
• 2011: 51%
• 2014: 48%
• The growth of world trade is currently
slowing down casting doubt on the
points made in this extract – has the
current phase of Globalisation stalled?
Sharp drop in world
trade in recession year
Extract 1: Text and Commentary
• It is argued that
globalisation brings
significant benefits both to
individual economies and
to the global economy as a
whole.
• It opens up markets
throughout the world,
promoting specialisation
and division of labour as
economies focus
production according to
their comparative
advantage.
Comparative advantage
• First introduced by David
Ricardo in 1817,
comparative advantage
exists when a country has a
‘margin of superiority’ in
the supply of a good or
service i.e. where the
marginal cost of production
is lower
• Countries will generally
specialise in and export
products which use
intensively the factor inputs
which they are most
abundantly endowed
Comparative Advantage and Economic Welfare
• If each country specializes, total output increases leading
to better allocative efficiency and economic welfare
• As a country develops more capabilities it can produce a
wider range of closely-linked goods and services – it can
diversify
• Countries such as South Korea, Japan, Germany, the USA
and UK all have a highly diversified pattern of exports
• Nations at a lower stage of development (e.g. Zambia and
Malawi) have fewer capabilities and export a narrower
range of products
Vertical Specialisation and Global Value Chains
• The last 20 years has seen more countries contributing to
global value chains
• Many nations specialize in particular stages of production (this
is vertical specialization) e.g. the components, design &
branding that go into making an iPad or iPhone
• For many developing countries, foreign direct investment in
manufacturing has led to a rise in vertical specialisation.
Examples include:
• “Factory Asia” in China, South Korea, Vietnam and others
• Specialisation in chemicals, glass, electrical in Poland and
Czech Republic – both countries are inside the EU
• Light manufacturing in sub Saharan African countries such
as Ethiopia and Kenya
New Global Value Chains – The iPad and Added Value!
“An Apple iPad is "Made in China" (it says so on the box) but only around 5% of
the price paid for an Apple iPad is actually paid for Chinese economic activity.
About 45% goes to Apple in the US, Korea takes around 8% for components, and
so forth. China has to import all those things, package them together, and then
export the finished product.” (Source: WTO Report published in 2015)
Overview of the Wider Gains from Trade
Export revenues and
jobs help to reduce the
scale of extreme poverty
Increased market
contestability reduces
prices for consumers
Better access to new
technologies lifts
productivity
Inflows of knowledge
across borders raises
human capital
Exploiting economies of
scale – causing lower
unit costs and prices
Better use of scarce
resources from trade in
sustainable technologies
Rising Developing Country Share of Global Trade
• “Developing economies have increased their participation in
international trade over the last 20 years.
• The share of exports to developing economies increased
from 26 per cent in 1995 to 39 per cent in 2014 ”
• (Source WTO, 2015)
Why is Trade important for Developing Countries?
• Successful trade provides for developing nations:
1. A source of foreign currency to help a nation’s balance of
payments (trade surplus countries build up US$ reserves)
2. An important way of financing imports of essential imports of
capital equipment / technologies and energy supplies
3. An injection of demand into the circular flow of income and
spending + creating positive export multiplier effects
4. Increased employment in export industries and related industries
and rising per capita incomes and strong HDI scores
5. Falling prices for consumers helps to increase real incomes e.g. by
opening up monopoly suppliers of energy to new competition
The share of the least-developed countries (LDCs) in world exports
increased from 0.5% of total trade in 1995 to 1.1% in 2014 (Source: WTO)
Risks of Trade & Investment for Developing Countries
• Overseas trade and investment also carries risks
1. Volatile global prices affecting export revenues and
profits and tax revenues for governments
2. There are risks that exports will be affected by geo-
political uncertainties and cyclical shifts in demand
3. Capital flows into developing nations are highly volatile
4. Opening up to trade and investment may actually cause
rising structural unemployment in some industries as the
pattern of demand, output and jobs changes – poorer
countries may opt for rapid industrialisation aided by
import protectionism before they open up
5. Countries that specialise in only a few natural resources
may suffer from the “natural resource trap”
Summary of Main Gains from Globalisation
1. Encourages producers and consumers to reap benefits from deeper
division of labour and economies of scale
2. Competitive markets reduce the scale of monopoly profits and incentivize
businesses to seek cost-reducing innovations
3. Enhanced growth has led to higher per capita incomes – and helped many
of poorest countries to achieve higher growth and reduce extreme poverty
4. Advantages from the freer movement of labour between countries
5. Dynamic efficiency gains from the sharing of ideas / skills / technologies
across national borders
6. Opening up of capital markets increases the opportunities for developing
countries to borrow money to help overcome a domestic savings gap
7. Increased awareness among people around the world of the substantial
challenges from climate change and wealth/income inequality
8. Competitive pressures of globalisation may prompt improved governance
and better labour protection through improved business standards
Summary of Disadvantages from Globalisation
1. More inequality / relative poverty leading to political and social tensions
and instability as a backlash.
2. Threats to the Global Commons e.g. threats of irreversible damage to
ecosystems, land degradation, deforestation, loss of bio-diversity and the
fears of a permanent shortage of water
3. Macroeconomic fragility – in an inter-connected world economy, external
shocks in region can rapidly spread to other centres – this can lead to highly
volatile capital movements and swings in trade flows
4. Trade Imbalances: Increasing trade imbalances lead to protectionist
tensions and a move towards managed exchange rates
5. Higher structural unemployment in countries where production has shifted
to lower cost centres
6. Standardization: Critics of globalisation point to less cultural diversity as
giant firms and global brands dominate domestic markets
7. Dominant Global Brands – businesses with dominant brands and superior
technologies may squeeze out local producers
Examples of Regional Trade Agreements
• The number of RTAs has risen from 70 in 1990 to over 300 now
• The World Trade Organisation permits the existence of trade blocs, provided
that they result in lower protection against outside countries than existed
before the creation of the trade bloc
• EU– a customs union, a single market and now with a single currency
• North American Free Trade Agreement (NAFTA) (1994)
• Mercosur – Brazil, Argentina, Uruguay, Paraguay and Venezuela
• Association of Southeast Asian Nations (ASEAN) Free Trade Area (AFTA)
• Common Market of Eastern and Southern Africa (COMESA) free trade area
that includes Zambia, Rwanda, Swaziland, Ethiopia and Kenya
• Pacific Alliance – 2013 – a regional trade agreement between Chile, Colombia,
Mexico and Peru
• Trans-Pacific Partnership (TPP) 2015 – this is a major new free trade
agreement negotiated between Australia, Brunei, Chile, Canada, Malaysia,
Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam
Extract 1: Text and Commentary
• Economies can access
larger markets than would
be the case without
globalisation.
• They can access more
capital goods and more
advanced technology, as
well as larger markets for
their exports.
• At the same time they can
benefit from cheaper
imports.
• Economic theory provides
strong support for the
process of globalisation in
terms of the benefits of
increased economic
efficiency.
• Larger markets:
• For most developing /
emerging countries this
means accessing markets of
countries with a higher GNI
per capita and larger GDP
(i.e. a bigger market size)
• The United States and China
are now officially the two
biggest countries in the
world
• For advanced countries,
growing consumer markets
in emerging countries offer
rich potential for trade in
goods and services and
investment
Economic Efficiency in Markets
For the exam make sure you are confident on each type of economic efficiency.
Then become confident in handling economic efficiency concepts and apply them
to the effects of trade, investment and the effects of successful supply-side policies
What is Economic Efficiency?
• Economic efficiency is achieved when optimum use is made of scarce
productive resources
• Allocative efficiency:
• Occurs when Price = Marginal Cost (or when the sum of consumer
and producer surplus is maximized)
• Allocative inefficiency: when P>MC; i.e. a deadweight loss exists
• Productive efficiency:
• When MC=ATC, when ATC is at its minimum; when producing at the
minimum efficient scale
• Dynamic efficiency:
• This occurs when a firm constantly updates its product offering/range
to reflect changing consumer preferences and wants
• X-inefficiency:
• This is the inefficiency that arises from complacency / lack of
motivation/morale existing from a lack of competition in an industry
Extract 1: Falling Tariffs – Average Tariffs in 2011-15
• Extract: “One of the many factors
promoting globalisation has been a
reduction of trade barriers, including
import tariffs.”
Source: WTO, 2015
Extract 1: Trade to GDP Ratios for 4 Countries
Malawi – a low income economy
Zambia – a lower-middle income economy
Brazil – an upper-middle income economy
Australia – a high income economy.
Malawi
Zambia
Australia
Brazil
Extract 1: Trade to GDP Ratios for 4 Countries
Malawi has seen a sharp rise in the ratio
of trade to GDP (from 69% to 111%)
whereas the trade-ratio for Zambia has
actually declined from 66% to 63%.
Malawi
Zambia
Extract 1: Trade to GDP Ratios for 4 Countries
Australian trade/GDP rose in 2009
whereas it fell for the other 3
countries. Australia avoided recession
partly because of continued
economic growth in China
Australia
Trade to GDP Ratios for 4 Countries – The Long View
This chart provides
long-run data on
trade as % of GDP
for the four
selected countries.
Zambia’s trade to
GDP ratio has
declined since
1960 whereas it
has risen for the
other 3 countries.
Malawi stands out
in terms of the
steep rise in the
trade-to-GDP ratio
to over 100% in
2011.
Explaining Trade to GDP Ratios in Excess of 100%
• The ratio of trade in goods and services to a nation’s GDP can be above
100% How can this happen?
• Many much smaller countries specialise in a few profitable industries in
which they have a clear comparative advantage.
• These industries may produce more money from exports than the entire
domestic economy!
• Export revenues then allows them to purchase imports in excess of what
their domestic economy could otherwise support.
• This leads to a high trade-to-GDP ratio perhaps in excess of 100%
• A country might also import intermediate products (e.g. essential
components) and then simply assemble for re-export. Again this causes
the value of trade to exceed measured GDP
1. Export-driven or import-dependent countries nearly always have a
high trade to GDP ratio.
2. Larger countries with more sophisticated production capabilities such
as the United States tend to have lower trade ratios
3. Small poor countries highly reliant on world trade have a high trade-to-
GDP ratio – it does not mean that these countries must remain poor
Focus on Malawi
• Malawi is landlocked (Zambia is one border)
• It is one of the poorest countries in the world
• National Income
• GDP per capita, PPP (constant 2011 international $): $756
• GNI per capita, PPP (constant 2011 international $): $726
• Exports and Imports
• Exports of goods and services (% of GDP): 47.6%
• Imports of goods and services (% of GDP): 60.5%
Malawi’s currency is the Kwacha and has been the
official currency since 1970
Malawi – Trade in a Global Context
• Malawi is a tiny economy in a global context
• It is the 147th largest export economy in the world and
it’s exports are 0.01% of the world total
• It is the 96th most complex economy according to the
Economic Complexity Index (ECI)
• GDP (million current US$, 2013) 3 705
• Merchandise exports (million US$) 1 208
• Merchandise imports (million US$) 2 845
• Total value of merchandise trade 4 053
• Merchandise trade as a % of GDP 109%
Malawi – Low Complexity / High Primary Dependence
Over 90% of Malawi’s exports of goods are agriculture or mining/extractive
products. Only 8% of their exports are manufactured goods
Malawi – Pattern of Imports of Goods
Malawi is dependent on final manufactured products and components for imports.
The biggest single import is fertilizer. South Africa is the key source of imports.
Explaining the Rise in Malawi Trade to GDP
• Malawi’s economy is very narrowly based.
• Agriculture represents approximately 37% of her GDP. The
rising value of their food exports has contributed to an
increase in their trade to GDP ratio
• So too has a surge in spending on imports due to a weakening
exchange rate (the demand for imports is price inelastic so a
weaker currency means that more money must be spent on
buying these imported products)
• Wholesale and retail trade, including hotel industry and
restaurants is the second largest contributor to GDP at 24%
• The growth of tourism into Malawi is another factor behind
the steep climb in the trade-to-GDP ratio – this could be good
news for future growth and development prospects
• Malawi has also joined a number of regional trade
agreements – leading to some trade creation effects
2015 Global Competitiveness Index for Malawi
Indicator
Malawi ranking out
of 140 countries
Overall
competitiveness
135/140
Institutions 92/140
Infrastructure 135/140
Macroeconomic
environment
140/140
Labour market
efficiency
29/140
Technological
readiness
133/140
Highlighted problems for business
• Access to financing
• Endemic corruption
• Crime and theft
Extract 1: Text and Commentary
• In 2007–08, financial and
economic crises in high
income developed
economies reduced the
growth in world trade as
their effects spread to the
global economy.
• There was a fear that the
sharp increase in
unemployment, particularly
in developed economies,
would lead to protectionist
measures.
• However, fears of global
trade wars quickly subsided
and the growth in world
trade recovered in 2010.
• Why did the crisis lead to a
slowdown in world trade?
1. The credit crunch led to a
steep fall in the
availability of trade credit
and trade insurance
2. Falling real incomes and
rising unemployment
caused consumption to
drop – leading to weaker
demand for imports
3. Fiscal austerity measures
also weakened global
aggregate demand
4. There was a rise in non-
tariff trade barriers and
managed exchange rates
WTO Report (2015) Annual Growth of World Trade
Source: www.wto.org/english/news_e/pres15_e/pr739_e.pdf
The biggest drop
in trade over the
past 20 years
Volume of world merchandise exports and gross domestic product, 1950-2014
(Annual percentage change) Trade Global GDP
1995-00 7.0 3.4
2000-05 4.9 2.9
2005-10 3.4 2.3
2010-14 3.3 2.5
2006 8.7 4.1
2007 6.5 3.9
2008 2.0 1.5
2009 -12.2 -2.1
2010 14.1 4.1
2011 5.5 2.8
2012 2.3 2.2
2013 2.9 2.4
2014 2.5 2.5
The Slowing Growth of World Trade since 2010
Source: WTO, 2015
Why is World Trade Growing Slowly at the Moment?
1. Weak economic growth in many of the world’s richest
countries – indeed some economists believe that Western
nations are suffering from secular stagnation
2. Impetus to global trade from the industrialization of Asia
seems to be fading. As Asian industrialization has slowed so
capital investment spending has declined in importance and
Asian demand for goods and services has softened.
3. Slowing pace of trade liberalization. The big gains to trade
from cutting tariffs may have already happened.
4. Non-tariff barriers have grown and regional trade blocs
such as ASEAN have become more common in place of a
new global trade agreement which seems a long way from
being achieved
5. Rising prosperity itself. As people become richer they spend
a higher proportion of their income on services, such as
education, leisure and health – global trade in services is
actually lower as a share of GDP than manufactured
products
Q3
Analysis: Diagram showing Import Tariffs
Q4Q1
Price
Domestic
Demand
OutputQ2
Domestic
Supply
World supply
pre-tariffP1
Supply after tariff
Volume of
imports
after tariff
P2
Import tariffs have economic welfare consequences, one of which is that the welfare of consumers who
must now purchase imports at a higher price has fallen – there is a deadweight loss of consumer surplus.
The effects of an import tariff on quantities depend on the price elasticity of demand and price elasticity
of supply of domestic businesses who are given a cushion of increased competitiveness by the tariff.
Analysis: Examples of Non-Tariff Barriers
1. Voluntary Export Restraint – where two countries make an
agreement to limit their exports to one another each year
2. Intellectual property laws e.g. patents and copyright protection
3. Technical barriers to trade including labeling rules and stringent
sanitary standards. These increase product compliance costs
4. Preferential state procurement policies – where government favour
local producers when finalizing contracts for state spending e.g.
infrastructure projects or purchasing new defence equipment
5. Domestic subsidies – government help (state aid) for domestic
businesses facing financial problems e.g. subsidies for car
manufacturers or loss-making airlines.
6. Financial protectionism – e.g. when a government instructs banks to
give priority when making loans to domestic businesses
7. Murky or hidden protectionism - e.g. state measures that indirectly
discriminate against foreign workers, investors and traders.
Understanding: Motivations for Protectionism
Response to export
“dumping” e.g. steel
Response to a chronic
trade gap
Employment
protection
Protect “fledgling” -
infant sectors
Protect key /politically
strategic industries
Raise tax revenues for
the government
Response to a
recession / low
aggregate demand
Arguments against Trade Barriers / Protectionism
Risk of Retaliation Market Distortions
Higher prices for
consumers
Regressive effect on
income inequality
By-passing import
controls
Higher costs for exporters
Extract
1
Economics of Globalisation and World Trade
Remember to refer clearly
to the pre-release data in
your final exam answers!
For more revision resources www.tutor2u.net/economics
Twitter: @tutor2ugeoff

Mais conteúdo relacionado

Mais procurados

Data response on the brazilian economy
Data response on the brazilian economyData response on the brazilian economy
Data response on the brazilian economytutor2u
 
4.2.5 Global-Competitiveness
4.2.5 Global-Competitiveness4.2.5 Global-Competitiveness
4.2.5 Global-CompetitivenessIGilmore
 
Globalisation & UK Economy 2015
Globalisation & UK Economy 2015Globalisation & UK Economy 2015
Globalisation & UK Economy 2015mattbentley34
 
The Copernican Revolution in the Study of Economic Growth
The Copernican Revolution in the Study of Economic Growth The Copernican Revolution in the Study of Economic Growth
The Copernican Revolution in the Study of Economic Growth John Ross
 
The International Economy
The International Economy The International Economy
The International Economy reoharsa
 
CHANGING GLOBAL TRADE PATTERNS
CHANGING GLOBAL TRADE PATTERNSCHANGING GLOBAL TRADE PATTERNS
CHANGING GLOBAL TRADE PATTERNSAbhishek Nagpal
 
Econ452 Learning Unit 01 - Part 2 - 2020 fall
Econ452 Learning Unit 01 - Part 2 - 2020 fallEcon452 Learning Unit 01 - Part 2 - 2020 fall
Econ452 Learning Unit 01 - Part 2 - 2020 fallsakanor
 
TRADE AND ECONOMIC DEVELOPMENT
TRADE AND ECONOMIC DEVELOPMENTTRADE AND ECONOMIC DEVELOPMENT
TRADE AND ECONOMIC DEVELOPMENTCláudio Carneiro
 
2008 H2 International Trade Lecture 1
2008 H2 International Trade Lecture 12008 H2 International Trade Lecture 1
2008 H2 International Trade Lecture 1tjcg1707
 
Newly Industrialised Countries
Newly Industrialised CountriesNewly Industrialised Countries
Newly Industrialised Countriesguest0edc68
 
AS Macro Key Term Glossary
AS Macro Key Term GlossaryAS Macro Key Term Glossary
AS Macro Key Term GlossaryEton College
 
International Business and Marketing
International Business and Marketing International Business and Marketing
International Business and Marketing Qamar Farooq
 
Confidence in Handling Economic Data
Confidence in Handling Economic DataConfidence in Handling Economic Data
Confidence in Handling Economic DataEton College
 
Lecture 1: Introduction to International Trade
Lecture 1: Introduction to International TradeLecture 1: Introduction to International Trade
Lecture 1: Introduction to International TradeRashedul Kabir (Shimul)
 
Trade Policies in Developing Countries
Trade Policies in Developing CountriesTrade Policies in Developing Countries
Trade Policies in Developing CountriesNisha Malhotra
 
Economic Growth And International Trade
Economic Growth And International TradeEconomic Growth And International Trade
Economic Growth And International TradeHitesh Kukreja
 

Mais procurados (20)

Data response on the brazilian economy
Data response on the brazilian economyData response on the brazilian economy
Data response on the brazilian economy
 
4.2.5 Global-Competitiveness
4.2.5 Global-Competitiveness4.2.5 Global-Competitiveness
4.2.5 Global-Competitiveness
 
Globalisation & UK Economy 2015
Globalisation & UK Economy 2015Globalisation & UK Economy 2015
Globalisation & UK Economy 2015
 
Emerging markets
Emerging marketsEmerging markets
Emerging markets
 
The Copernican Revolution in the Study of Economic Growth
The Copernican Revolution in the Study of Economic Growth The Copernican Revolution in the Study of Economic Growth
The Copernican Revolution in the Study of Economic Growth
 
The International Economy
The International Economy The International Economy
The International Economy
 
CHANGING GLOBAL TRADE PATTERNS
CHANGING GLOBAL TRADE PATTERNSCHANGING GLOBAL TRADE PATTERNS
CHANGING GLOBAL TRADE PATTERNS
 
Important concepts in International Business
Important concepts in International Business Important concepts in International Business
Important concepts in International Business
 
Econ452 Learning Unit 01 - Part 2 - 2020 fall
Econ452 Learning Unit 01 - Part 2 - 2020 fallEcon452 Learning Unit 01 - Part 2 - 2020 fall
Econ452 Learning Unit 01 - Part 2 - 2020 fall
 
TRADE AND ECONOMIC DEVELOPMENT
TRADE AND ECONOMIC DEVELOPMENTTRADE AND ECONOMIC DEVELOPMENT
TRADE AND ECONOMIC DEVELOPMENT
 
2008 H2 International Trade Lecture 1
2008 H2 International Trade Lecture 12008 H2 International Trade Lecture 1
2008 H2 International Trade Lecture 1
 
Newly Industrialised Countries
Newly Industrialised CountriesNewly Industrialised Countries
Newly Industrialised Countries
 
Global trading
Global tradingGlobal trading
Global trading
 
AS Macro Key Term Glossary
AS Macro Key Term GlossaryAS Macro Key Term Glossary
AS Macro Key Term Glossary
 
International Business and Marketing
International Business and Marketing International Business and Marketing
International Business and Marketing
 
Confidence in Handling Economic Data
Confidence in Handling Economic DataConfidence in Handling Economic Data
Confidence in Handling Economic Data
 
Lecture 1: Introduction to International Trade
Lecture 1: Introduction to International TradeLecture 1: Introduction to International Trade
Lecture 1: Introduction to International Trade
 
Trade Policies in Developing Countries
Trade Policies in Developing CountriesTrade Policies in Developing Countries
Trade Policies in Developing Countries
 
Economic Growth And International Trade
Economic Growth And International TradeEconomic Growth And International Trade
Economic Growth And International Trade
 
International trade
International tradeInternational trade
International trade
 

Destaque

OCR F585 Economics June 2016 - Extract 3
OCR F585 Economics June 2016 - Extract 3OCR F585 Economics June 2016 - Extract 3
OCR F585 Economics June 2016 - Extract 3tutor2u
 
Currency Economics
Currency EconomicsCurrency Economics
Currency Economicstutor2u
 
The Human Development Index
The Human Development IndexThe Human Development Index
The Human Development Indextutor2u
 
Globalisation & the indian economy
Globalisation & the  indian economyGlobalisation & the  indian economy
Globalisation & the indian economyVinayak Mehrotra
 
Lack of basic Nessecities
Lack of basic NessecitiesLack of basic Nessecities
Lack of basic NessecitiesPriyan1993
 
Proverty presentation
Proverty presentationProverty presentation
Proverty presentationjanju1822
 
Tuuli Steward - Criminal Penalty - a Form of Exclusion and Marginalization
Tuuli Steward - Criminal Penalty - a Form of Exclusion and Marginalization Tuuli Steward - Criminal Penalty - a Form of Exclusion and Marginalization
Tuuli Steward - Criminal Penalty - a Form of Exclusion and Marginalization Global Utmaning
 
OCR F585 Economics - Extract 2 - Globalisation and Trade Imbalances
OCR F585 Economics - Extract 2 - Globalisation and Trade ImbalancesOCR F585 Economics - Extract 2 - Globalisation and Trade Imbalances
OCR F585 Economics - Extract 2 - Globalisation and Trade Imbalancestutor2u
 
Economic Profile for Chile
Economic Profile for ChileEconomic Profile for Chile
Economic Profile for Chiletutor2u
 
Economic Profile for Mexico
Economic Profile for MexicoEconomic Profile for Mexico
Economic Profile for Mexicotutor2u
 
South Korea Macroeconomic Profile
South Korea Macroeconomic ProfileSouth Korea Macroeconomic Profile
South Korea Macroeconomic Profiletutor2u
 
Lesson 3 How Has Globaisation Changed Manufacturing Tn Cs
Lesson 3 How Has Globaisation Changed Manufacturing   Tn CsLesson 3 How Has Globaisation Changed Manufacturing   Tn Cs
Lesson 3 How Has Globaisation Changed Manufacturing Tn Cstudorgeog
 
What is Globalization
What is GlobalizationWhat is Globalization
What is Globalizationvova231
 
Bond Prices and Interest Rates
Bond Prices and Interest RatesBond Prices and Interest Rates
Bond Prices and Interest Ratestutor2u
 
OCR F85 Global Economy June 2016 Key Definitions
OCR F85 Global Economy June 2016 Key DefinitionsOCR F85 Global Economy June 2016 Key Definitions
OCR F85 Global Economy June 2016 Key Definitionstutor2u
 
Economic Profile for Zambia
Economic Profile for ZambiaEconomic Profile for Zambia
Economic Profile for Zambiatutor2u
 
Trade creation & diversion notes
Trade creation & diversion notesTrade creation & diversion notes
Trade creation & diversion notesmattbentley34
 
OCR F585 Economics June 2016 - Extract 4
OCR F585 Economics June 2016 - Extract 4OCR F585 Economics June 2016 - Extract 4
OCR F585 Economics June 2016 - Extract 4tutor2u
 

Destaque (20)

Globalisation
GlobalisationGlobalisation
Globalisation
 
OCR F585 Economics June 2016 - Extract 3
OCR F585 Economics June 2016 - Extract 3OCR F585 Economics June 2016 - Extract 3
OCR F585 Economics June 2016 - Extract 3
 
Currency Economics
Currency EconomicsCurrency Economics
Currency Economics
 
The Human Development Index
The Human Development IndexThe Human Development Index
The Human Development Index
 
Globalisation & the indian economy
Globalisation & the  indian economyGlobalisation & the  indian economy
Globalisation & the indian economy
 
Lack of basic Nessecities
Lack of basic NessecitiesLack of basic Nessecities
Lack of basic Nessecities
 
Proverty presentation
Proverty presentationProverty presentation
Proverty presentation
 
Tuuli Steward - Criminal Penalty - a Form of Exclusion and Marginalization
Tuuli Steward - Criminal Penalty - a Form of Exclusion and Marginalization Tuuli Steward - Criminal Penalty - a Form of Exclusion and Marginalization
Tuuli Steward - Criminal Penalty - a Form of Exclusion and Marginalization
 
OCR F585 Economics - Extract 2 - Globalisation and Trade Imbalances
OCR F585 Economics - Extract 2 - Globalisation and Trade ImbalancesOCR F585 Economics - Extract 2 - Globalisation and Trade Imbalances
OCR F585 Economics - Extract 2 - Globalisation and Trade Imbalances
 
Economic Profile for Chile
Economic Profile for ChileEconomic Profile for Chile
Economic Profile for Chile
 
Economic Profile for Mexico
Economic Profile for MexicoEconomic Profile for Mexico
Economic Profile for Mexico
 
South Korea Macroeconomic Profile
South Korea Macroeconomic ProfileSouth Korea Macroeconomic Profile
South Korea Macroeconomic Profile
 
Lesson 3 How Has Globaisation Changed Manufacturing Tn Cs
Lesson 3 How Has Globaisation Changed Manufacturing   Tn CsLesson 3 How Has Globaisation Changed Manufacturing   Tn Cs
Lesson 3 How Has Globaisation Changed Manufacturing Tn Cs
 
Adaptability and viability of "corporate farming" in agriculture sector in India
Adaptability and viability of "corporate farming" in agriculture sector in IndiaAdaptability and viability of "corporate farming" in agriculture sector in India
Adaptability and viability of "corporate farming" in agriculture sector in India
 
What is Globalization
What is GlobalizationWhat is Globalization
What is Globalization
 
Bond Prices and Interest Rates
Bond Prices and Interest RatesBond Prices and Interest Rates
Bond Prices and Interest Rates
 
OCR F85 Global Economy June 2016 Key Definitions
OCR F85 Global Economy June 2016 Key DefinitionsOCR F85 Global Economy June 2016 Key Definitions
OCR F85 Global Economy June 2016 Key Definitions
 
Economic Profile for Zambia
Economic Profile for ZambiaEconomic Profile for Zambia
Economic Profile for Zambia
 
Trade creation & diversion notes
Trade creation & diversion notesTrade creation & diversion notes
Trade creation & diversion notes
 
OCR F585 Economics June 2016 - Extract 4
OCR F585 Economics June 2016 - Extract 4OCR F585 Economics June 2016 - Extract 4
OCR F585 Economics June 2016 - Extract 4
 

Semelhante a OCR F585 Economics - Extract 1 - Globalisation and Trade

Economics of Globalisation
Economics of GlobalisationEconomics of Globalisation
Economics of Globalisationtutor2u
 
Power Point Presenation for the subejct of International Business
Power Point Presenation for the subejct of International Business Power Point Presenation for the subejct of International Business
Power Point Presenation for the subejct of International Business Syed Valiullah Bakhtiyari
 
International trade and development
International trade and development International trade and development
International trade and development Vaibhav verma
 
Econ452 Learning Unit 01 - Part 1
Econ452 Learning Unit 01 - Part 1Econ452 Learning Unit 01 - Part 1
Econ452 Learning Unit 01 - Part 1sakanor
 
Econ452 Learning Unit 01 - Part 1 - 2020 fall
Econ452 Learning Unit 01 - Part 1 - 2020 fallEcon452 Learning Unit 01 - Part 1 - 2020 fall
Econ452 Learning Unit 01 - Part 1 - 2020 fallsakanor
 
Globalization by Islam El-Shafie
Globalization by Islam El-ShafieGlobalization by Islam El-Shafie
Globalization by Islam El-ShafieIslam El-Shafie
 
International Trade and Policy- Introduction by Neeraj Bhandari (Surkhet Nepal)
International Trade and Policy- Introduction by Neeraj Bhandari (Surkhet Nepal)International Trade and Policy- Introduction by Neeraj Bhandari (Surkhet Nepal)
International Trade and Policy- Introduction by Neeraj Bhandari (Surkhet Nepal)Neeraj Bhandari
 
Globalisation - Gains, Drivers and Enablers
Globalisation - Gains, Drivers and EnablersGlobalisation - Gains, Drivers and Enablers
Globalisation - Gains, Drivers and EnablersAndrewTibbitt1
 
Production and trade structure 2.pptx
Production and trade structure 2.pptxProduction and trade structure 2.pptx
Production and trade structure 2.pptxDramaneGermainThiomb1
 
Rao 4b factors in food security 2 trade and aid
Rao 4b   factors in food security 2   trade and aidRao 4b   factors in food security 2   trade and aid
Rao 4b factors in food security 2 trade and aidSizwan Ahammed
 
Globalization major forces is kind of components of global running business o...
Globalization major forces is kind of components of global running business o...Globalization major forces is kind of components of global running business o...
Globalization major forces is kind of components of global running business o...MengsongNguon
 
AS Macro Revision: Economic Growth
AS Macro Revision: Economic GrowthAS Macro Revision: Economic Growth
AS Macro Revision: Economic Growthtutor2u
 
Topic 5 a globalized economy
Topic 5 a globalized economyTopic 5 a globalized economy
Topic 5 a globalized economyTeresa Pérez
 
Globalisation for slideshare 2013
Globalisation for slideshare 2013Globalisation for slideshare 2013
Globalisation for slideshare 2013James Jeffery
 
Trade policies in developing Countries
Trade policies in developing CountriesTrade policies in developing Countries
Trade policies in developing CountriesVaibhav verma
 

Semelhante a OCR F585 Economics - Extract 1 - Globalisation and Trade (20)

Economics of Globalisation
Economics of GlobalisationEconomics of Globalisation
Economics of Globalisation
 
Power Point Presenation for the subejct of International Business
Power Point Presenation for the subejct of International Business Power Point Presenation for the subejct of International Business
Power Point Presenation for the subejct of International Business
 
Legal outsourcing
Legal outsourcingLegal outsourcing
Legal outsourcing
 
International trade and development
International trade and development International trade and development
International trade and development
 
Econ452 Learning Unit 01 - Part 1
Econ452 Learning Unit 01 - Part 1Econ452 Learning Unit 01 - Part 1
Econ452 Learning Unit 01 - Part 1
 
Econ452 Learning Unit 01 - Part 1 - 2020 fall
Econ452 Learning Unit 01 - Part 1 - 2020 fallEcon452 Learning Unit 01 - Part 1 - 2020 fall
Econ452 Learning Unit 01 - Part 1 - 2020 fall
 
Globalization by Islam El-Shafie
Globalization by Islam El-ShafieGlobalization by Islam El-Shafie
Globalization by Islam El-Shafie
 
International Trade and Policy- Introduction by Neeraj Bhandari (Surkhet Nepal)
International Trade and Policy- Introduction by Neeraj Bhandari (Surkhet Nepal)International Trade and Policy- Introduction by Neeraj Bhandari (Surkhet Nepal)
International Trade and Policy- Introduction by Neeraj Bhandari (Surkhet Nepal)
 
Globalisation - Gains, Drivers and Enablers
Globalisation - Gains, Drivers and EnablersGlobalisation - Gains, Drivers and Enablers
Globalisation - Gains, Drivers and Enablers
 
Production and trade structure 2.pptx
Production and trade structure 2.pptxProduction and trade structure 2.pptx
Production and trade structure 2.pptx
 
Globalization
GlobalizationGlobalization
Globalization
 
Globalisation
GlobalisationGlobalisation
Globalisation
 
Rao 4b factors in food security 2 trade and aid
Rao 4b   factors in food security 2   trade and aidRao 4b   factors in food security 2   trade and aid
Rao 4b factors in food security 2 trade and aid
 
Globalization major forces is kind of components of global running business o...
Globalization major forces is kind of components of global running business o...Globalization major forces is kind of components of global running business o...
Globalization major forces is kind of components of global running business o...
 
AS Macro Revision: Economic Growth
AS Macro Revision: Economic GrowthAS Macro Revision: Economic Growth
AS Macro Revision: Economic Growth
 
Topic 5 a globalized economy
Topic 5 a globalized economyTopic 5 a globalized economy
Topic 5 a globalized economy
 
Globalisation for slideshare 2013
Globalisation for slideshare 2013Globalisation for slideshare 2013
Globalisation for slideshare 2013
 
topic 1.pdf
topic 1.pdftopic 1.pdf
topic 1.pdf
 
Trade policies in developing Countries
Trade policies in developing CountriesTrade policies in developing Countries
Trade policies in developing Countries
 
Globalization and You
Globalization and YouGlobalization and You
Globalization and You
 

Mais de tutor2u

Economics Enrichment Activities
Economics Enrichment ActivitiesEconomics Enrichment Activities
Economics Enrichment Activitiestutor2u
 
Trade Unions - Revision Evaluation
Trade Unions - Revision EvaluationTrade Unions - Revision Evaluation
Trade Unions - Revision Evaluationtutor2u
 
Revision on Economics of Public Goods
Revision on Economics of Public GoodsRevision on Economics of Public Goods
Revision on Economics of Public Goodstutor2u
 
Poverty Reduction Policies in Low Income Countries
Poverty Reduction Policies in Low Income CountriesPoverty Reduction Policies in Low Income Countries
Poverty Reduction Policies in Low Income Countriestutor2u
 
20 Key Facts on the UK Economy in 2019
20 Key Facts on the UK Economy in 201920 Key Facts on the UK Economy in 2019
20 Key Facts on the UK Economy in 2019tutor2u
 
Quantitative easing advantages_disadvantages
Quantitative easing advantages_disadvantagesQuantitative easing advantages_disadvantages
Quantitative easing advantages_disadvantagestutor2u
 
Monetary union
Monetary unionMonetary union
Monetary uniontutor2u
 
UK Economy Update_2019
UK Economy Update_2019UK Economy Update_2019
UK Economy Update_2019tutor2u
 
Supply-Side Policies (2019 Examples Update)
Supply-Side Policies (2019 Examples Update)Supply-Side Policies (2019 Examples Update)
Supply-Side Policies (2019 Examples Update)tutor2u
 
Applied Macro Examples for Economics Exams
Applied Macro Examples for Economics ExamsApplied Macro Examples for Economics Exams
Applied Macro Examples for Economics Examstutor2u
 
Microeconomics - Great Applied Examples for Exams
Microeconomics - Great Applied Examples for ExamsMicroeconomics - Great Applied Examples for Exams
Microeconomics - Great Applied Examples for Examstutor2u
 
Business Objectives and Stakeholders
Business Objectives and StakeholdersBusiness Objectives and Stakeholders
Business Objectives and Stakeholderstutor2u
 
Profit Satisficing
Profit SatisficingProfit Satisficing
Profit Satisficingtutor2u
 
Why Businesses Grow
Why Businesses GrowWhy Businesses Grow
Why Businesses Growtutor2u
 
Sizes and Types of Firms
Sizes and Types of FirmsSizes and Types of Firms
Sizes and Types of Firmstutor2u
 
The UK Productivity Gap
The UK Productivity GapThe UK Productivity Gap
The UK Productivity Gaptutor2u
 
Trade Unions with a Monopsony Employer
Trade Unions with a Monopsony EmployerTrade Unions with a Monopsony Employer
Trade Unions with a Monopsony Employertutor2u
 
Labour Market Failure (2019 Update)
Labour Market Failure (2019 Update)Labour Market Failure (2019 Update)
Labour Market Failure (2019 Update)tutor2u
 
Behavioural Economics Update 2019
Behavioural Economics Update 2019Behavioural Economics Update 2019
Behavioural Economics Update 2019tutor2u
 
Consumer surplus and price changes
Consumer surplus and price changesConsumer surplus and price changes
Consumer surplus and price changestutor2u
 

Mais de tutor2u (20)

Economics Enrichment Activities
Economics Enrichment ActivitiesEconomics Enrichment Activities
Economics Enrichment Activities
 
Trade Unions - Revision Evaluation
Trade Unions - Revision EvaluationTrade Unions - Revision Evaluation
Trade Unions - Revision Evaluation
 
Revision on Economics of Public Goods
Revision on Economics of Public GoodsRevision on Economics of Public Goods
Revision on Economics of Public Goods
 
Poverty Reduction Policies in Low Income Countries
Poverty Reduction Policies in Low Income CountriesPoverty Reduction Policies in Low Income Countries
Poverty Reduction Policies in Low Income Countries
 
20 Key Facts on the UK Economy in 2019
20 Key Facts on the UK Economy in 201920 Key Facts on the UK Economy in 2019
20 Key Facts on the UK Economy in 2019
 
Quantitative easing advantages_disadvantages
Quantitative easing advantages_disadvantagesQuantitative easing advantages_disadvantages
Quantitative easing advantages_disadvantages
 
Monetary union
Monetary unionMonetary union
Monetary union
 
UK Economy Update_2019
UK Economy Update_2019UK Economy Update_2019
UK Economy Update_2019
 
Supply-Side Policies (2019 Examples Update)
Supply-Side Policies (2019 Examples Update)Supply-Side Policies (2019 Examples Update)
Supply-Side Policies (2019 Examples Update)
 
Applied Macro Examples for Economics Exams
Applied Macro Examples for Economics ExamsApplied Macro Examples for Economics Exams
Applied Macro Examples for Economics Exams
 
Microeconomics - Great Applied Examples for Exams
Microeconomics - Great Applied Examples for ExamsMicroeconomics - Great Applied Examples for Exams
Microeconomics - Great Applied Examples for Exams
 
Business Objectives and Stakeholders
Business Objectives and StakeholdersBusiness Objectives and Stakeholders
Business Objectives and Stakeholders
 
Profit Satisficing
Profit SatisficingProfit Satisficing
Profit Satisficing
 
Why Businesses Grow
Why Businesses GrowWhy Businesses Grow
Why Businesses Grow
 
Sizes and Types of Firms
Sizes and Types of FirmsSizes and Types of Firms
Sizes and Types of Firms
 
The UK Productivity Gap
The UK Productivity GapThe UK Productivity Gap
The UK Productivity Gap
 
Trade Unions with a Monopsony Employer
Trade Unions with a Monopsony EmployerTrade Unions with a Monopsony Employer
Trade Unions with a Monopsony Employer
 
Labour Market Failure (2019 Update)
Labour Market Failure (2019 Update)Labour Market Failure (2019 Update)
Labour Market Failure (2019 Update)
 
Behavioural Economics Update 2019
Behavioural Economics Update 2019Behavioural Economics Update 2019
Behavioural Economics Update 2019
 
Consumer surplus and price changes
Consumer surplus and price changesConsumer surplus and price changes
Consumer surplus and price changes
 

Último

renaltumors upasana sahu Group 50.pptxism
renaltumors upasana sahu Group 50.pptxismrenaltumors upasana sahu Group 50.pptxism
renaltumors upasana sahu Group 50.pptxismthxz2fdqxw
 
Pros and Cons of Interest-Only DSCR Loans
Pros and Cons of Interest-Only DSCR LoansPros and Cons of Interest-Only DSCR Loans
Pros and Cons of Interest-Only DSCR LoansPark Place Finance LLC
 
14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdf
14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdf14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdf
14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdfjamie766122
 
Stock Market Brief Deck FOR 3142024..pdf
Stock Market Brief Deck FOR 3142024..pdfStock Market Brief Deck FOR 3142024..pdf
Stock Market Brief Deck FOR 3142024..pdfMichael Silva
 
2024.03 Strategic Resources_Pub (1). pdf
2024.03 Strategic Resources_Pub (1). pdf2024.03 Strategic Resources_Pub (1). pdf
2024.03 Strategic Resources_Pub (1). pdfAdnet Communications
 
powerpoint presentation about asian regioonalism
powerpoint presentation about asian regioonalismpowerpoint presentation about asian regioonalism
powerpoint presentation about asian regioonalismrezeraaisla
 
The Role of Non-Banking Financial Companies (NBFCs).pdf
The Role of Non-Banking Financial Companies (NBFCs).pdfThe Role of Non-Banking Financial Companies (NBFCs).pdf
The Role of Non-Banking Financial Companies (NBFCs).pdfChampak Jhagmag
 
First, Second, and Third Generation Islamic Economicss
First, Second, and Third Generation Islamic EconomicssFirst, Second, and Third Generation Islamic Economicss
First, Second, and Third Generation Islamic EconomicssAsad Zaman
 
Planning of societal re/production in a commonist society
Planning of societal re/production in a commonist societyPlanning of societal re/production in a commonist society
Planning of societal re/production in a commonist societyStefanMz
 
Mytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdf
Mytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdfMytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdf
Mytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdfNewsroom8
 
2024.03 Strategic Resources_Pub presentation
2024.03 Strategic Resources_Pub presentation2024.03 Strategic Resources_Pub presentation
2024.03 Strategic Resources_Pub presentationAdnet Communications
 
AUDITING FRAUDS OF AN ENGLISH COMPANY.PPTX
AUDITING FRAUDS OF AN ENGLISH COMPANY.PPTXAUDITING FRAUDS OF AN ENGLISH COMPANY.PPTX
AUDITING FRAUDS OF AN ENGLISH COMPANY.PPTXkamikazekujoh
 
Islamic banking in Afghanistan from start until now
Islamic banking in Afghanistan from start until nowIslamic banking in Afghanistan from start until now
Islamic banking in Afghanistan from start until nowhamidzafar6
 
ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...
ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...
ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...indexPub
 
Swift_Maintaining Critical Standards(...).pptx.pdf
Swift_Maintaining Critical Standards(...).pptx.pdfSwift_Maintaining Critical Standards(...).pptx.pdf
Swift_Maintaining Critical Standards(...).pptx.pdfNeo4j
 
BIHC Briefing Greece March 2024, with Crédit Agricole CIB
BIHC Briefing Greece March 2024, with Crédit Agricole CIBBIHC Briefing Greece March 2024, with Crédit Agricole CIB
BIHC Briefing Greece March 2024, with Crédit Agricole CIBNeil Day
 
Buy-Side Leaps Into Gen AI Era by Jasper Colin
Buy-Side Leaps Into Gen AI Era by Jasper ColinBuy-Side Leaps Into Gen AI Era by Jasper Colin
Buy-Side Leaps Into Gen AI Era by Jasper ColinJasper Colin
 
Economic Risk Factor Update: March 2024 [SlideShare]
Economic Risk Factor Update: March 2024 [SlideShare]Economic Risk Factor Update: March 2024 [SlideShare]
Economic Risk Factor Update: March 2024 [SlideShare]Commonwealth
 
Challenging Factors of Rural Women Entrepreneurs in West Bengal
Challenging Factors of Rural Women Entrepreneurs in West  BengalChallenging Factors of Rural Women Entrepreneurs in West  Bengal
Challenging Factors of Rural Women Entrepreneurs in West BengalNabarun Chakraborty
 

Último (20)

renaltumors upasana sahu Group 50.pptxism
renaltumors upasana sahu Group 50.pptxismrenaltumors upasana sahu Group 50.pptxism
renaltumors upasana sahu Group 50.pptxism
 
Pros and Cons of Interest-Only DSCR Loans
Pros and Cons of Interest-Only DSCR LoansPros and Cons of Interest-Only DSCR Loans
Pros and Cons of Interest-Only DSCR Loans
 
14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdf
14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdf14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdf
14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdf
 
Stock Market Brief Deck FOR 3142024..pdf
Stock Market Brief Deck FOR 3142024..pdfStock Market Brief Deck FOR 3142024..pdf
Stock Market Brief Deck FOR 3142024..pdf
 
Closing Remarks International Women's Day 2024
Closing Remarks International Women's Day 2024Closing Remarks International Women's Day 2024
Closing Remarks International Women's Day 2024
 
2024.03 Strategic Resources_Pub (1). pdf
2024.03 Strategic Resources_Pub (1). pdf2024.03 Strategic Resources_Pub (1). pdf
2024.03 Strategic Resources_Pub (1). pdf
 
powerpoint presentation about asian regioonalism
powerpoint presentation about asian regioonalismpowerpoint presentation about asian regioonalism
powerpoint presentation about asian regioonalism
 
The Role of Non-Banking Financial Companies (NBFCs).pdf
The Role of Non-Banking Financial Companies (NBFCs).pdfThe Role of Non-Banking Financial Companies (NBFCs).pdf
The Role of Non-Banking Financial Companies (NBFCs).pdf
 
First, Second, and Third Generation Islamic Economicss
First, Second, and Third Generation Islamic EconomicssFirst, Second, and Third Generation Islamic Economicss
First, Second, and Third Generation Islamic Economicss
 
Planning of societal re/production in a commonist society
Planning of societal re/production in a commonist societyPlanning of societal re/production in a commonist society
Planning of societal re/production in a commonist society
 
Mytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdf
Mytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdfMytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdf
Mytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdf
 
2024.03 Strategic Resources_Pub presentation
2024.03 Strategic Resources_Pub presentation2024.03 Strategic Resources_Pub presentation
2024.03 Strategic Resources_Pub presentation
 
AUDITING FRAUDS OF AN ENGLISH COMPANY.PPTX
AUDITING FRAUDS OF AN ENGLISH COMPANY.PPTXAUDITING FRAUDS OF AN ENGLISH COMPANY.PPTX
AUDITING FRAUDS OF AN ENGLISH COMPANY.PPTX
 
Islamic banking in Afghanistan from start until now
Islamic banking in Afghanistan from start until nowIslamic banking in Afghanistan from start until now
Islamic banking in Afghanistan from start until now
 
ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...
ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...
ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...
 
Swift_Maintaining Critical Standards(...).pptx.pdf
Swift_Maintaining Critical Standards(...).pptx.pdfSwift_Maintaining Critical Standards(...).pptx.pdf
Swift_Maintaining Critical Standards(...).pptx.pdf
 
BIHC Briefing Greece March 2024, with Crédit Agricole CIB
BIHC Briefing Greece March 2024, with Crédit Agricole CIBBIHC Briefing Greece March 2024, with Crédit Agricole CIB
BIHC Briefing Greece March 2024, with Crédit Agricole CIB
 
Buy-Side Leaps Into Gen AI Era by Jasper Colin
Buy-Side Leaps Into Gen AI Era by Jasper ColinBuy-Side Leaps Into Gen AI Era by Jasper Colin
Buy-Side Leaps Into Gen AI Era by Jasper Colin
 
Economic Risk Factor Update: March 2024 [SlideShare]
Economic Risk Factor Update: March 2024 [SlideShare]Economic Risk Factor Update: March 2024 [SlideShare]
Economic Risk Factor Update: March 2024 [SlideShare]
 
Challenging Factors of Rural Women Entrepreneurs in West Bengal
Challenging Factors of Rural Women Entrepreneurs in West  BengalChallenging Factors of Rural Women Entrepreneurs in West  Bengal
Challenging Factors of Rural Women Entrepreneurs in West Bengal
 

OCR F585 Economics - Extract 1 - Globalisation and Trade

  • 1. Extract 1 Economics of Globalisation and World Trade Remember to refer clearly to the pre-release data in your final exam answers!
  • 2. OCR F585 Economics – For June 2016 Pre-Release A2 Economics Case Study Toolkit from Tutor2u
  • 3. Extract 1: Key Term Glossary Key term Brief definition Globalisation A process of deeper economic integration and interdependence between countries Capital markets Markets for bonds (debt) and equities (shares) Foreign direct investment (FDI) Inflows of capital from overseas including takeovers Specialisation Specializing factor inputs in a certain task Division of labour Breaking down production into smaller individual tasks Comparative advantage Comparative advantage refers to the relative cost advantage that one country has over another Economic efficiency Making optimum use of scarce factor inputs Import tariffs Ad valorem taxes on the value of imported products Absolute advantage The ability to produce a product (good or service) at a lower absolute unit cost
  • 4. Globalisation is a process in which national economies have become increasingly integrated and inter-dependent
  • 5. The OECD defines globalization as “The geographic dispersion of industrial and service activities, for example research and development, sourcing of inputs, production and distribution, and the cross-border networking of companies, for example through joint ventures and the sharing of assets.”
  • 6. Trade to GDP ratios are rising for most countries Expansion of Financial Capital Flows between countries Rising Foreign Direct Investment and Cross Border M&A Rise of global brands – including many from emerging countries Deeper specialization of labour – i.e. components from many nations Global supply chains & new trade and investment routes Selection of Important Aspects of Globalisation
  • 7. Extract 1: Text and Commentary • The closer links between the world’s economies are seen in a number of indicators. • These include: 1. The value of trade in goods and services as a percentage of world GDP is increasing 2. Foreign Direct Investment (FDI) as a percentage of world GDP has increased six-fold since 1980 3. The number of migrant workers has trebled since the 1960s. • Merchandise trade as a share of GDP is the sum of exports and imports divided by the value of GDP, all expressed in current US$. • This trade-to-global GDP ratio has risen in the long term but has actually been stable or declining gently in recent years. (Source IMF) • World trade-to-GDP ratio since 2006 • 2006: 47% • 2008: 53% • 2009: 43% • 2011: 51% • 2014: 48% • The growth of world trade is currently slowing down casting doubt on the points made in this extract – has the current phase of Globalisation stalled? Sharp drop in world trade in recession year
  • 8. Extract 1: Text and Commentary • It is argued that globalisation brings significant benefits both to individual economies and to the global economy as a whole. • It opens up markets throughout the world, promoting specialisation and division of labour as economies focus production according to their comparative advantage. Comparative advantage • First introduced by David Ricardo in 1817, comparative advantage exists when a country has a ‘margin of superiority’ in the supply of a good or service i.e. where the marginal cost of production is lower • Countries will generally specialise in and export products which use intensively the factor inputs which they are most abundantly endowed
  • 9. Comparative Advantage and Economic Welfare • If each country specializes, total output increases leading to better allocative efficiency and economic welfare • As a country develops more capabilities it can produce a wider range of closely-linked goods and services – it can diversify • Countries such as South Korea, Japan, Germany, the USA and UK all have a highly diversified pattern of exports • Nations at a lower stage of development (e.g. Zambia and Malawi) have fewer capabilities and export a narrower range of products
  • 10. Vertical Specialisation and Global Value Chains • The last 20 years has seen more countries contributing to global value chains • Many nations specialize in particular stages of production (this is vertical specialization) e.g. the components, design & branding that go into making an iPad or iPhone • For many developing countries, foreign direct investment in manufacturing has led to a rise in vertical specialisation. Examples include: • “Factory Asia” in China, South Korea, Vietnam and others • Specialisation in chemicals, glass, electrical in Poland and Czech Republic – both countries are inside the EU • Light manufacturing in sub Saharan African countries such as Ethiopia and Kenya
  • 11. New Global Value Chains – The iPad and Added Value! “An Apple iPad is "Made in China" (it says so on the box) but only around 5% of the price paid for an Apple iPad is actually paid for Chinese economic activity. About 45% goes to Apple in the US, Korea takes around 8% for components, and so forth. China has to import all those things, package them together, and then export the finished product.” (Source: WTO Report published in 2015)
  • 12. Overview of the Wider Gains from Trade Export revenues and jobs help to reduce the scale of extreme poverty Increased market contestability reduces prices for consumers Better access to new technologies lifts productivity Inflows of knowledge across borders raises human capital Exploiting economies of scale – causing lower unit costs and prices Better use of scarce resources from trade in sustainable technologies
  • 13. Rising Developing Country Share of Global Trade • “Developing economies have increased their participation in international trade over the last 20 years. • The share of exports to developing economies increased from 26 per cent in 1995 to 39 per cent in 2014 ” • (Source WTO, 2015)
  • 14. Why is Trade important for Developing Countries? • Successful trade provides for developing nations: 1. A source of foreign currency to help a nation’s balance of payments (trade surplus countries build up US$ reserves) 2. An important way of financing imports of essential imports of capital equipment / technologies and energy supplies 3. An injection of demand into the circular flow of income and spending + creating positive export multiplier effects 4. Increased employment in export industries and related industries and rising per capita incomes and strong HDI scores 5. Falling prices for consumers helps to increase real incomes e.g. by opening up monopoly suppliers of energy to new competition The share of the least-developed countries (LDCs) in world exports increased from 0.5% of total trade in 1995 to 1.1% in 2014 (Source: WTO)
  • 15. Risks of Trade & Investment for Developing Countries • Overseas trade and investment also carries risks 1. Volatile global prices affecting export revenues and profits and tax revenues for governments 2. There are risks that exports will be affected by geo- political uncertainties and cyclical shifts in demand 3. Capital flows into developing nations are highly volatile 4. Opening up to trade and investment may actually cause rising structural unemployment in some industries as the pattern of demand, output and jobs changes – poorer countries may opt for rapid industrialisation aided by import protectionism before they open up 5. Countries that specialise in only a few natural resources may suffer from the “natural resource trap”
  • 16. Summary of Main Gains from Globalisation 1. Encourages producers and consumers to reap benefits from deeper division of labour and economies of scale 2. Competitive markets reduce the scale of monopoly profits and incentivize businesses to seek cost-reducing innovations 3. Enhanced growth has led to higher per capita incomes – and helped many of poorest countries to achieve higher growth and reduce extreme poverty 4. Advantages from the freer movement of labour between countries 5. Dynamic efficiency gains from the sharing of ideas / skills / technologies across national borders 6. Opening up of capital markets increases the opportunities for developing countries to borrow money to help overcome a domestic savings gap 7. Increased awareness among people around the world of the substantial challenges from climate change and wealth/income inequality 8. Competitive pressures of globalisation may prompt improved governance and better labour protection through improved business standards
  • 17. Summary of Disadvantages from Globalisation 1. More inequality / relative poverty leading to political and social tensions and instability as a backlash. 2. Threats to the Global Commons e.g. threats of irreversible damage to ecosystems, land degradation, deforestation, loss of bio-diversity and the fears of a permanent shortage of water 3. Macroeconomic fragility – in an inter-connected world economy, external shocks in region can rapidly spread to other centres – this can lead to highly volatile capital movements and swings in trade flows 4. Trade Imbalances: Increasing trade imbalances lead to protectionist tensions and a move towards managed exchange rates 5. Higher structural unemployment in countries where production has shifted to lower cost centres 6. Standardization: Critics of globalisation point to less cultural diversity as giant firms and global brands dominate domestic markets 7. Dominant Global Brands – businesses with dominant brands and superior technologies may squeeze out local producers
  • 18. Examples of Regional Trade Agreements • The number of RTAs has risen from 70 in 1990 to over 300 now • The World Trade Organisation permits the existence of trade blocs, provided that they result in lower protection against outside countries than existed before the creation of the trade bloc • EU– a customs union, a single market and now with a single currency • North American Free Trade Agreement (NAFTA) (1994) • Mercosur – Brazil, Argentina, Uruguay, Paraguay and Venezuela • Association of Southeast Asian Nations (ASEAN) Free Trade Area (AFTA) • Common Market of Eastern and Southern Africa (COMESA) free trade area that includes Zambia, Rwanda, Swaziland, Ethiopia and Kenya • Pacific Alliance – 2013 – a regional trade agreement between Chile, Colombia, Mexico and Peru • Trans-Pacific Partnership (TPP) 2015 – this is a major new free trade agreement negotiated between Australia, Brunei, Chile, Canada, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam
  • 19. Extract 1: Text and Commentary • Economies can access larger markets than would be the case without globalisation. • They can access more capital goods and more advanced technology, as well as larger markets for their exports. • At the same time they can benefit from cheaper imports. • Economic theory provides strong support for the process of globalisation in terms of the benefits of increased economic efficiency. • Larger markets: • For most developing / emerging countries this means accessing markets of countries with a higher GNI per capita and larger GDP (i.e. a bigger market size) • The United States and China are now officially the two biggest countries in the world • For advanced countries, growing consumer markets in emerging countries offer rich potential for trade in goods and services and investment
  • 20. Economic Efficiency in Markets For the exam make sure you are confident on each type of economic efficiency. Then become confident in handling economic efficiency concepts and apply them to the effects of trade, investment and the effects of successful supply-side policies
  • 21. What is Economic Efficiency? • Economic efficiency is achieved when optimum use is made of scarce productive resources • Allocative efficiency: • Occurs when Price = Marginal Cost (or when the sum of consumer and producer surplus is maximized) • Allocative inefficiency: when P>MC; i.e. a deadweight loss exists • Productive efficiency: • When MC=ATC, when ATC is at its minimum; when producing at the minimum efficient scale • Dynamic efficiency: • This occurs when a firm constantly updates its product offering/range to reflect changing consumer preferences and wants • X-inefficiency: • This is the inefficiency that arises from complacency / lack of motivation/morale existing from a lack of competition in an industry
  • 22. Extract 1: Falling Tariffs – Average Tariffs in 2011-15 • Extract: “One of the many factors promoting globalisation has been a reduction of trade barriers, including import tariffs.” Source: WTO, 2015
  • 23. Extract 1: Trade to GDP Ratios for 4 Countries Malawi – a low income economy Zambia – a lower-middle income economy Brazil – an upper-middle income economy Australia – a high income economy. Malawi Zambia Australia Brazil
  • 24. Extract 1: Trade to GDP Ratios for 4 Countries Malawi has seen a sharp rise in the ratio of trade to GDP (from 69% to 111%) whereas the trade-ratio for Zambia has actually declined from 66% to 63%. Malawi Zambia
  • 25. Extract 1: Trade to GDP Ratios for 4 Countries Australian trade/GDP rose in 2009 whereas it fell for the other 3 countries. Australia avoided recession partly because of continued economic growth in China Australia
  • 26. Trade to GDP Ratios for 4 Countries – The Long View This chart provides long-run data on trade as % of GDP for the four selected countries. Zambia’s trade to GDP ratio has declined since 1960 whereas it has risen for the other 3 countries. Malawi stands out in terms of the steep rise in the trade-to-GDP ratio to over 100% in 2011.
  • 27. Explaining Trade to GDP Ratios in Excess of 100% • The ratio of trade in goods and services to a nation’s GDP can be above 100% How can this happen? • Many much smaller countries specialise in a few profitable industries in which they have a clear comparative advantage. • These industries may produce more money from exports than the entire domestic economy! • Export revenues then allows them to purchase imports in excess of what their domestic economy could otherwise support. • This leads to a high trade-to-GDP ratio perhaps in excess of 100% • A country might also import intermediate products (e.g. essential components) and then simply assemble for re-export. Again this causes the value of trade to exceed measured GDP 1. Export-driven or import-dependent countries nearly always have a high trade to GDP ratio. 2. Larger countries with more sophisticated production capabilities such as the United States tend to have lower trade ratios 3. Small poor countries highly reliant on world trade have a high trade-to- GDP ratio – it does not mean that these countries must remain poor
  • 28. Focus on Malawi • Malawi is landlocked (Zambia is one border) • It is one of the poorest countries in the world • National Income • GDP per capita, PPP (constant 2011 international $): $756 • GNI per capita, PPP (constant 2011 international $): $726 • Exports and Imports • Exports of goods and services (% of GDP): 47.6% • Imports of goods and services (% of GDP): 60.5% Malawi’s currency is the Kwacha and has been the official currency since 1970
  • 29. Malawi – Trade in a Global Context • Malawi is a tiny economy in a global context • It is the 147th largest export economy in the world and it’s exports are 0.01% of the world total • It is the 96th most complex economy according to the Economic Complexity Index (ECI) • GDP (million current US$, 2013) 3 705 • Merchandise exports (million US$) 1 208 • Merchandise imports (million US$) 2 845 • Total value of merchandise trade 4 053 • Merchandise trade as a % of GDP 109%
  • 30. Malawi – Low Complexity / High Primary Dependence Over 90% of Malawi’s exports of goods are agriculture or mining/extractive products. Only 8% of their exports are manufactured goods
  • 31. Malawi – Pattern of Imports of Goods Malawi is dependent on final manufactured products and components for imports. The biggest single import is fertilizer. South Africa is the key source of imports.
  • 32. Explaining the Rise in Malawi Trade to GDP • Malawi’s economy is very narrowly based. • Agriculture represents approximately 37% of her GDP. The rising value of their food exports has contributed to an increase in their trade to GDP ratio • So too has a surge in spending on imports due to a weakening exchange rate (the demand for imports is price inelastic so a weaker currency means that more money must be spent on buying these imported products) • Wholesale and retail trade, including hotel industry and restaurants is the second largest contributor to GDP at 24% • The growth of tourism into Malawi is another factor behind the steep climb in the trade-to-GDP ratio – this could be good news for future growth and development prospects • Malawi has also joined a number of regional trade agreements – leading to some trade creation effects
  • 33. 2015 Global Competitiveness Index for Malawi Indicator Malawi ranking out of 140 countries Overall competitiveness 135/140 Institutions 92/140 Infrastructure 135/140 Macroeconomic environment 140/140 Labour market efficiency 29/140 Technological readiness 133/140 Highlighted problems for business • Access to financing • Endemic corruption • Crime and theft
  • 34. Extract 1: Text and Commentary • In 2007–08, financial and economic crises in high income developed economies reduced the growth in world trade as their effects spread to the global economy. • There was a fear that the sharp increase in unemployment, particularly in developed economies, would lead to protectionist measures. • However, fears of global trade wars quickly subsided and the growth in world trade recovered in 2010. • Why did the crisis lead to a slowdown in world trade? 1. The credit crunch led to a steep fall in the availability of trade credit and trade insurance 2. Falling real incomes and rising unemployment caused consumption to drop – leading to weaker demand for imports 3. Fiscal austerity measures also weakened global aggregate demand 4. There was a rise in non- tariff trade barriers and managed exchange rates
  • 35. WTO Report (2015) Annual Growth of World Trade Source: www.wto.org/english/news_e/pres15_e/pr739_e.pdf The biggest drop in trade over the past 20 years
  • 36. Volume of world merchandise exports and gross domestic product, 1950-2014 (Annual percentage change) Trade Global GDP 1995-00 7.0 3.4 2000-05 4.9 2.9 2005-10 3.4 2.3 2010-14 3.3 2.5 2006 8.7 4.1 2007 6.5 3.9 2008 2.0 1.5 2009 -12.2 -2.1 2010 14.1 4.1 2011 5.5 2.8 2012 2.3 2.2 2013 2.9 2.4 2014 2.5 2.5 The Slowing Growth of World Trade since 2010 Source: WTO, 2015
  • 37. Why is World Trade Growing Slowly at the Moment? 1. Weak economic growth in many of the world’s richest countries – indeed some economists believe that Western nations are suffering from secular stagnation 2. Impetus to global trade from the industrialization of Asia seems to be fading. As Asian industrialization has slowed so capital investment spending has declined in importance and Asian demand for goods and services has softened. 3. Slowing pace of trade liberalization. The big gains to trade from cutting tariffs may have already happened. 4. Non-tariff barriers have grown and regional trade blocs such as ASEAN have become more common in place of a new global trade agreement which seems a long way from being achieved 5. Rising prosperity itself. As people become richer they spend a higher proportion of their income on services, such as education, leisure and health – global trade in services is actually lower as a share of GDP than manufactured products
  • 38. Q3 Analysis: Diagram showing Import Tariffs Q4Q1 Price Domestic Demand OutputQ2 Domestic Supply World supply pre-tariffP1 Supply after tariff Volume of imports after tariff P2 Import tariffs have economic welfare consequences, one of which is that the welfare of consumers who must now purchase imports at a higher price has fallen – there is a deadweight loss of consumer surplus. The effects of an import tariff on quantities depend on the price elasticity of demand and price elasticity of supply of domestic businesses who are given a cushion of increased competitiveness by the tariff.
  • 39. Analysis: Examples of Non-Tariff Barriers 1. Voluntary Export Restraint – where two countries make an agreement to limit their exports to one another each year 2. Intellectual property laws e.g. patents and copyright protection 3. Technical barriers to trade including labeling rules and stringent sanitary standards. These increase product compliance costs 4. Preferential state procurement policies – where government favour local producers when finalizing contracts for state spending e.g. infrastructure projects or purchasing new defence equipment 5. Domestic subsidies – government help (state aid) for domestic businesses facing financial problems e.g. subsidies for car manufacturers or loss-making airlines. 6. Financial protectionism – e.g. when a government instructs banks to give priority when making loans to domestic businesses 7. Murky or hidden protectionism - e.g. state measures that indirectly discriminate against foreign workers, investors and traders.
  • 40. Understanding: Motivations for Protectionism Response to export “dumping” e.g. steel Response to a chronic trade gap Employment protection Protect “fledgling” - infant sectors Protect key /politically strategic industries Raise tax revenues for the government Response to a recession / low aggregate demand
  • 41. Arguments against Trade Barriers / Protectionism Risk of Retaliation Market Distortions Higher prices for consumers Regressive effect on income inequality By-passing import controls Higher costs for exporters
  • 42. Extract 1 Economics of Globalisation and World Trade Remember to refer clearly to the pre-release data in your final exam answers!
  • 43. For more revision resources www.tutor2u.net/economics Twitter: @tutor2ugeoff