Economic Globalization

Module 2

Oikos

Household

Nomos or Nemein

to distribute/to manage

Economics

Study of ‘Household Management

Economics

a branch of social sciences that deals in understanding the market and economy of a country, area or region

production

consumption

distribution

3 MAIN ACTIVITIES THAT SURROUND GOODS AND SERVICES

PCD

Production

amount of goods and services manufactured and produced per year.

Consumption

amount of goods and services that are used by the population per year.

Distribution

availability of goods and services to the various sections of a country.

Economics

explores the behavior of the consumers in relation to the shift in prices of the goods and services

Consumers
Producers

TWO ENTITIES OF ECONOMICS

Consumers

consumes the goods and services

Producers

provides for these goods and services

Economics

science of wealth

Economics

the economy of a nation depends on the wealth generated through the goods and services

Economics

includes the exports and imports of the goods and services, which is indicated by consumption and production

Adam Smith

Father of Economics

Adam Smith

He said that Economics is science of wealth

the economy of a nation depends on the wealth generated through the goods and services

includes the exports and imports of the goods and services, which is indicated by consumption and production

Economics

wealth is used for employing scarce resources that can have substitute uses

Economics

goods and services made out of the scarce resources are distributed to the society for usage

Park Samuelson

He said that Economics is a wealth used for employing scarce resources that can have substitute uses

goods and services made out of the scarce resources are distributed to the society for usage

Scarcity

Why do we need to study Economics

Wants

are unlimited but resources are limited

Economics/Economist

try to solve this problem by economizing the limited resources to somehow fulfill the unlimited wants.

National Level

resources in a country can be scarce or abundant

government must plan the appropriate allocation of resources as they are limited and must be used strategically

Microeconomics

Macroeconomics

2 CLASSIFICATION OF ECONOMICS

Microeconomics

study of what is likely to happen when individuals make choices in response to changes in incentives, prices, resources, or methods of production

Policymakers

to understand the effect of setting a minimum wage or subsidizing the production of certain commodities.

Businesses

to analyze pricing or production choices.

Individuals

to assess purchasing and spending decisions.

Policymakers
Businesses
Individuals

WHERE IS MICROECONOMICS USED (PBI)

Considerations

How Important Is Microeconomics in Our Daily Life?

Considerations

Make, model

incentives such as rebates or low interest rates

income constraints

Macroeconomics

field of study that analyzes an economy through a wide lens

unemployment, Gross Domestic Product (GDP), and inflation

INFLATION

rate of increase in prices over a given period of time

typically, a broad measure

represents how much more expensive the relevant set of goods and/or services has become over a certain period

economist’s forecasts

used by government entities to aid in constructing and evaluating economic, monetary, and fiscal policy

Macroeconomics

Businesses use the models to set strategies in domestic and global markets

Investors

use them to predict and plan for movements in various asset classes.

Macroeconomics

Investors use them to predict and plan for movements in various asset classes.

Economic Globalization

the increasing integration of economies around the world, particularly through the movement of goods, services, and capital across borders

International Monetary Fund

an organization where Economic Globalization is the increasing integration of economies around the world, particularly through the movement of goods, services, and capital across borders

Economic Globalization

increasing interdependence of world economies due to growing scale of cross-border trade of commodities and services

flow of international capital

rapid spread of technologies

Economic Globalization

advancement of science and technologies has greatly reduced the cost of transportation and communication

Economic Globalization

process of global industrial restructuring and readjustment

Ideology Behind Neoliberalism

a system of widely shared ideas, patterned beliefs, guiding norms and values, and ideals accepted as truth by some group

Ideology Behind Neoliberalism

simplifies tremendous complexity, it is often distorted as well In addition to distortion, ideology also serves to legitimate and to integrate.

neoliberalism

associated with the leadership of Margaret Thatcher, the prime minister of the U.K. from 1979 to 1990, and Ronald Reagan, the 40th president of the U.S. from 1981 to 1989.

Margaret Thatcher

prime minister of the UK associates with neoliberalism

Ronald Reagan

the 40th president of the U.S. associated with neoliberalism

Neoliberal globalization

an approach to economic globalization

value of free market competition

minimal state intervention in economic and social affairs

Neoliberal globalization

government spending and taxes are reduced

interested in privatizing various sectors (transportation, telecommunications, oil, social housing, education, etc.)

the globalization of trade of goods and services

the globalization of financial and capital markets

the globalization of technology and communication

the globalization of production

4 ASPECT OF ECONOMIC GLOBALIZATION

TFTP

the globalization of financial and capital markets

refers to the movements of currencies through direct and portfolio investments making the world market the playing ground of the Transnational Corporations

New York Stock Exchange (NYSE)

National Association of Securities Dealers Automated Quotations (NASDAQ)

The most prominent exchanges in the U.S. are the

the globalization of technology and communication

refers to the cross-cultural development and exchange of technology

the globalization of technology and communication

worldwide integration of media (all print, digital, and electronic means of communication)

the globalization of production

refers to the system wherein the various parts of a certain product are manufactured in different parts of the world

the globalization of production

refers to the system wherein the various parts of a certain product are manufactured in different parts of the world

International Monetary Fund

an organization that works to promote global economic growth and financial stability, which are key elements of globalization

International Monetary Fund

an organization that is to furthering international monetary cooperation, encouraging the expansion of trade and economic growth, and discouraging policies that would harm prosperity

The World Bank

an international financial institution that provides loans and grants to developing countries to help reduce poverty and improve their economies

Provides financial support

Provides technical assistance

Trains policy makers

World Trade Organization

an international organization that regulates and facilitates trade between countries

World Trade Organization

to make trade flow smoothly and freely

began operations on January 1, 1995, replacing the General Agreement on Tariffs and Trade (GATT)

World Trade Organization

International Monetary Fund

The World Bank

Institutions that were created to manage the world economy

WIT

Thomas Friedman

He declares that the world is flat, or the word has been flattened

Thomas Friedman

he said that “global competitive playing field was being leveled” to collaborate and compete equal access to technology, information, and resources of the world

Fall of Berlin Wall

Introduction of Netscape to the public

Invention of Work Flow Software

Outsourcing

Offshoring

Open-sourcing

Insourcing

Supply-chaining

Informing

Steroids

10 SIGNIFICANT EVENTS THAT HAVE FLATTENED THE WORLD

FIIOOOISIS

Pope Francis

Human rights are not only violated by terrorism, repression or assassination, but also by unfair economic structures that creates huge inequalities. WHO SAID THIS?

Private

In Capitalism, what type of ownership is emphasized?

Free markets

What type of markets are characteristic of Capitalism?

Encouraged

How is competition viewed in Capitalism?

Emphasis

What is the emphasis regarding individualism in Capitalism?

Limited

What is the typical role of government in Capitalism?

Potentially unequal

How is wealth distribution described in Capitalism?

Collective/State

In Communism, what type of ownership is emphasized?

Central planning

What type of economic planning is characteristic of Communism?

Discouraged

How is competition viewed in Communism?

Limited

How is individualism described in Communism?

Dominant

What is the typical role of government in Communism?

Aimed to be equal

What is the aim regarding wealth distribution in Communism?