International Economic Integration

Summary:

The notes discuss various aspects of international economic integration, including the global economy, GDP, recent factors hindering growth, trade wars, COVID’s impact, labour movement, and the influence of government economic forums and organizations.

The global economy encompasses all production, trade, financial flows, investment, technology, and labour. Gross World Product (GWP) is the total market value of all goods and services produced by all countries, adjusted for exchange rates and national price variations. The IMF measures GDP and GDP at Purchasing Power Parity (PPP) to compare the economic activity of different countries. Factors hindering growth include sovereign debt, persistent budget deficits, Brexit, protectionist policies, fluctuating commodity prices, trade wars, and the impact of COVID.

International economic integration is facilitated by trade in goods and services, financial flows, investment flows, technology, transport, communication, and the labour movement. Trade has significantly grown over time, with changes in the composition and direction of trade. Financial flows involve money between nations in various forms, such as interest rates, currency, equity, and commodities derivatives. Foreign direct investment (FDI) refers to the movement of funds between economies to establish new companies or acquire shares in existing ones. Transnational corporations (TNCs) play a significant role in global production and dominate the product and factor markets. Technology, transport, and communication advancements have contributed to increased globalization. The movement of labour involves migration and corporate offshoring.

Various factors influence international and regional business cycles, including trade flows, investment flows, TNCs, financial flows, financial market confidence, global interest rates, commodity prices, and international organizations like the G7/8 and G20.

Excerpt:

International Economic Integration

ECO NOTES (YR 11/12 START)
International economic integration
The Global economy; economic activity in the world
– All production, trade, financial flows, investment, technology, labour
Gross World Product; World GDP at PPP
– World GDP at PPP; the total market value of all g & s produced by all countries
o adjusted for exchange rates and national variations in price
o (e.g. increase price if a country can afford it or less supply in a country= higher price)