THE GLOBAL ECONOMY

**Economic globalization**

* a historical process representing the result of human innovation and technological progress.
* Refers to the expanding interdependence of world economies
* Characterized by integration of economies through the movement of goods, services, and capital which are products of people, organizations, institutions, and technologies

Gross Domestic Product (GDP)

the market value of all

**Silk Road**

a network of pathways in the ancient world that spanned from China to what is now the Middle East and to Europe; international trading but was not considered global yet

**Galleon Trade**

* connected Manila and Acapulco in 1571;


* the first time that the Americans were directly connected to Asian trading routes

**Mercantilism**

* The galleon trade was a part
* system of global trade with multiple restrictions; mainly monarchies imposed this taxes or duties to be paid on a particular class of imports or exports

**International Monetary System**

more than just money or currencies; it also reflects economic power and interests, as money is inherently political, an integral part of “high politics” of diplomacy (Cohen, 2000: 91).

**Gold**

one of the least reactive chemical elements and is solid under standard conditions

**Fiat Currencies**

currencies that are not backed by precious metals and whose value is determined by their cost relative to other currencies

**World War I**

countries were forced to abandon the gold standard after depleting their gold reserves to fund their enemies

**The Great Depression**

global economic crisis during the 1920s and extended up to the 1930s

**The Bretton Woods System**

* a global economic system that would ensure a longer-lasting global peace; a network of global financial institutions that would promote economic interdependence and prosperity

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* inaugurated in 1944 during the United Nations Monetary and Financial Conference

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* John Maynard Keynes: British economist who believed that economic crises occur not when a country does not have enough money, but when money is not being spent and, thereby not moving

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* International Bank for Reconstruction and Development (IBRD or World Bank), International Monetary Fund (IMF), and General Agreement on Tariffs and Trade (GATT)

**Global Keynesianism**

high point came in the mid-1940s to the early 1970s

**Organization of Arab Petroleum Exporting Countries**

imposed an embargo in response to the decision of the United States and other countries to resupply the Israeli military with the needed arms during the Yom Kippur War/ October War/ Ramadan War

**Stagflation**

STAGNATION & INFLATION

**Neoliberalism**

a new form of economic thinking; from the 1980s onward, this became the codified strategy of the United States Treasury Department, the World Bank, the IMF, and eventually the World Trade Organization

**Washington Consensus (shock therapy)**

Minimal government spending to reduce government spending; called for the privatization of government-controlled services

**Shock Therapy**

* theorizes that sudden, dramatic changes in national economic policy can turn a state-controlled economy into a free market economy

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* intended to cure economic maladies such as hyperinflation, shortages, and other effects of market controls to jumpstart economic production, reduce unemployment, and improve living standards

**The Global Financial Crisis**

* 2008 – 2009

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* due to the United States’ systematic decision to remove various banking and investment restrictions

* Christopher Columbus in 1492

Discovery of America

Vasco De Gama 1498

Discovery of the direct sea route to India

Filipinos

first Asian immigrants in the United States

**European Monetary Integration**

refers to a 30-year long process that began at the end of the1960s as a form of monetary cooperation by the European Economic Community Member States intended to reduce the excessive influence of the US dollar on domestic exchange rates, and led, through various attempts, to the creation of a Monetary Union and a common currency.

**World Trade Organization**

was launched in 1995, and has become an official forum for trade negotiations.

**United Nations Conference on Trade and Development**

aims to promote trade and cooperation between the developing and developed nations.