Lesson 1: The Global Economy Flashcards

Vocabulary flashcards covering key definitions, theories, scholars, statistics, and concepts from Lesson 1: The Global Economy.

IMF (2008)

The body that defines economic globalization as the increasing integration of economies through movement of goods, services, and capital across borders.

Benczes (2014)

Identified four interconnected dimensions of economic globalization: trade, financial/capital markets, technology/communication, and production.

Szentes (2003)

Defined globalization as "a process making the world economy an organic system."

Trade surplus (positive balance of trade)

The amount by which the value of a country's exports exceeds the cost of its imports.

Trade deficit (negative balance of trade)

The amount by which the cost of a country's imports exceeds the value of its exports.

Trade balance

Total Value of Exports minus Total Value of Imports.

US Trade Deficit (2017)

$566 billion

China's Announced Trade Surplus (2017)

$422.5 billion

Supply chain

The network connecting the people, organizations, resources, activities, and technology involved in creating and selling a product, from raw material to end user.

Multidomestic GPNs

The classification of Global Production Networks concerned with products that are easy to replicate and costly to transport over long distances.

Globally Integrated GPNs

The classification of Global Production Networks involving complex products manufactured in interdependent stages across countries.

Global commodity chains

The network of labor and production processes culminating in a finished product made available to consumers worldwide.

Producer-driven chain

The type of commodity chain that flows from manufacturers to distributors to retailers/dealers.

Buyer-driven chain

The type of commodity chain that flows from factories/traders/overseas buyers to branded marketers and retailers.

Gereffi (1994/2012)

The scholar who describes global value chains as highlighting "the relative value of economic activities required to bring a good or service from conception… to final disposal after use."

Outsourcing

The process of transferring work or activities once performed by one entity to another entity in exchange for money.

Offshore outsourcing

The type of outsourcing most closely and significantly linked to globalization, involving sending work to companies in other countries.

Four Main Elements of Consumption (Ritzer et al., 2001)

Consumer objects, consumers, the consumption process, and consumption sites.

Hyper consumption

The global flow that refers to buying more than one can afford.

Hyper debt

The global flow that refers to owing more than one will be able to pay back.

The Modern World-System

Wallerstein's theory centered on a large economic entity with a division of labor not constrained by political or cultural boundaries.

Core

The level in Wallerstein's hierarchy that controls the capitalist world-economy and exploits the rest of the system (e.g., US and Japan).

Periphery

The level in Wallerstein's hierarchy that provides raw materials to the core and is heavily exploited (e.g., many African countries).

Semi-periphery

The level in Wallerstein's hierarchy that falls midway between exploiting and being exploited (e.g., India).

Race to the bottom

The popular concept describing how less developed countries undercut competition through lower salaries and poorer conditions to attract MNCs.

Industrial upgrading

The term for when economic players move from low-value to relatively high-value activities in global production networks (Gereffi, 2005).

Hirst et al. (2009)

Argues that globalization, especially economic globalization, is a myth.