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The Global Economy

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Structures of Globalization

Economy
Politics
Culture
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2.1 The Global Economy

Learning Outcomes:
At the end of this lesson, the learners are expected to demonstrate the following:
 Define economic globalization
 Analyze the actors that facilitates economic globalization
 Articulate a stance on global economic integration
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Globalization

Worldwide interconnectedness in all aspects of the contemporary social

life.

It is a multidimensional phenomenon.

Economic dimension is one of the major driving force.

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The Global Economy

ECONOMIC GLOBALIZATION
It is a historical process.
It is the increasing integration of economies around the
world through movements of goods, services, and capitals
across borders.
Transportation and Communications Revolution
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The Global Economy

ECONOMIC GLOBALIZATION
“ The process of making the world economy an
“organic system” by extending transnational economic
processes and relations to more and more countries and
by deepening the economic interdependency among
them.
Szentes (2003)
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Attributes of Economic Globalization

1. The globalization of trade of goods and services.

2. The globalization of financial and capital markets.

3. The globalization of technology and communication.

4. The globalization of production.

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The Actors
of economic globalization

 Nation-states
 Global Corporations
 International Monetary Systems
 International Financial Institutions
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The Actors
of economic globalization

Nation-states

For hyper globalists, nation-states ceased a primary economic organization.

People consume highly standardized global products and services produced by global
corporations in a borderless world.

There is no national product and national companies.

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Peace of Westphalia (1618-1648)

Established the notion of state as SOVEREIGN.

- legal equality

- non-intervention

- a repudiation of supranationalism as law-making bodies

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The Actors
of economic globalization

Global Corporations

Multinational corporations

Transnational corporations
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MNCs
They have investment in
other countries, but do not
have coordinated product
offerings in each country.
They are more focused on
adapting their products and
services to each individual
local market.
TNCs
They are more complex
organizations which have
invested in foreign operations,
have a central corporate facility
but give decision making,
research and development, and
marketing powers to each
individual foreign market.
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The Actors
of economic globalization

International Monetary Systems (IMS)

Rules, customs, instruments, facilities, and organizations for

effecting international payments

Facilitatescross-border transactions involving trade and

investments
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The Actors
of economic globalization

The Gold Standard

In the 19th century, UK, France, USA, Italy, Germany and other European nations adopted the Gold
Standard as a fixed exchange rate regime until the 1930s.

Bretton Wood Standards

It adopted the gold-dollar exchange standard. Various currencies were fixed to the US dollar until
1971.

- International Banks for Reconstruction and Development

- International Monetary Fund

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The Actors
of economic globalization

European Monetary Integration

Germany, France, Italy, The Netherlands, Belgium and Luxembourg created a
common market where goods and services, capital and labor moved freely
European Economic Community, 1957
European Monetary System, 1979
European Exchange Rate and Monetary Union, 1992
 European Central Bank, 1999

EURO as a reserved currency

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The Actors
of economic globalization

International Financial Institutions

- World Bank
- International Monetary Fund
- Asian Development Bank
- African Development Bank
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Is economic globalization beneficial to the Philippines or not?

Articulate your stance.