geog 216

economic internationalization

degree to which countries interact w one another
based on trade/gdp ratio
quantitative
doesn't include capital

economic globalization

degree to which countries are interconnected
quantitative and qualitative
includes capital flows
functional integration
new actors i.e. institutions

internationalization vs globalization

- inclusion of capital flows
- quantitative vs qualitative
- consideration of factors other than GDP
- measurable vs non-measurable

hyperglobalizers

- globalization is real
- less role of nation-state
- new world order
- borderless economy

skeptics

- globalization = mislabelling of internationalization
- nation state plays primary role
- bordered economies

transformationalists

- globalization is ongoing process
- uneven patterns of dvpt
- national borders don't correlate to economies
- local-global impacts

3 key elements of globalization

1. ongoing processes
2. intensification + acceleration
3. magnified local-global impacts

phase 1 of intl trade

early commercial expansion
mercantilism to fordism

phase 2 of intl trade

industrial revolution
free trade
new communications + transport

phases of international trade

1. early commercial expansion
2. industrial revolution

2 features of modern economy

type of flows: increased trade, MNCs, stocks over bonds
breadth + depth of market integration

3 drivers of commercial integration

1. trade liberalization
2. capital market liberalization
3. cooperative intl governance

trade liberalization

reduced barriers, trade agreements

capital market liberalization

relaxation of capital flows

cooperative intl governance

multilateral trade, encouraging globalization

consequences of globalization

- loss of domestic control
- trade flows are intra-firm
- job losses vs. opps. in diff sectors

economic institutions

govern commerce, trade, production and consumption, set rules regulations and norms

productive efficiency

using PPB accurately

allocative efficiency

distributed acc. to needs of pop

political economy

considers political institutions in determining economy

2 drivers of economic growth

1. new tech
2. new resources

limitations of GDP

doesn't consider:
- informal sector
- income distribution
- welfare

gini coefficient

higher=worse inequality

primary activities

raw material extraction

secondary activities

raw -> manufactured goods

tertiary activities

exchg of goods/services

quaternary activities

research+development

light manufacturing

secondary activity: finished consumer goods

heavy manufacturing

secondary activity: intermediate products, capital intensive

rust belt

new york -> great lakes, manufacturing belt of coal, steel, primary + sec activities

sun belt

all of lower states, quaternary activities, tech dvpt

global triad

NAFTA, EU, ASEAN

value of global economy

$ 104 trillion

85%

% of manufacturing activities made by EU NA ASEAN

growth rate of trade

faster rate than output growth

newly industrialized economies

regions with most trade growth

time-space compression

bc of globalization and increased circulation technologies, time+space shrink -> distributed unevenly

circulation technologies

transport and communication

1965 canada-us auto pact

- bilateral trade
- eliminated tariffs
- specialization of output
- intra-industry trade increased
- safeguards
- not a distinct move to free trade

free vs managed trade

free trade = across all sectors, managed = specific to 1 sector

canada manufacturing belt

ontario and quebec

economies of scope

spreading average costs over a variety of products , forms agglomeration

economies of scale

producing more of one product as to lessen the average cost

agglomeration economy

cost advantages to producers and consumers from concentrated location

absolute advantage

when one actor can make a product at a faster rate and with more efficiency

comparative advantage

when one actor has a lower opportunity cost for producing one product than another actor

competitive advantage

an actor has an advantage over another on the basis of factor endowment, demand/supply conditions, or firm structure

treaty of tordesillas

divided world btwn portugal and spain

treaty of zaragoza

amended treaty of tordesillas to account for roundness of earth rather than flatness

innovations of early commercial expansion

- transport and communication innovation
- technological innovation
- use of gold and silver
- necessary trade surplus

4 ways mercantilism flourished

1. trade surplus
2. new monetary system of gold and silver
3. import tariffs
4. strong military institutions

2 ways mercantilism declined

1. misattribution of source of wealth leading to inflation, etc
2. political move towards democracy: mercantilism necessitated monarchy

4 drivers of 19th c trade boom

1. adoption of gold standard
2. mass migration due to slavery
3. free trade due to industrial revolution
4. increased circulation technologies

4 economic roles of colonies

1. supplied resources
2. source of wealth for colonizers
3. investment opportunities
4. safety value

5 consequences of colonialism

1. reduced indigenous populations
2. urbanization and industrialization
3. focus on primary products
4. movement of nation state
5. dual societies

3 outcomes of trade boom

1. economic growth
2. income divergence
3. market integration

marshall plan

economic plan to rebuild destroyed infrastructure of war-torn cities in europe: started notion of development

3 ways countries develop

1. economic structural change
2. urbanization
3. inequality

export oriented industrialization

economic activity directed towards exporting goods to raise GDP

import substitution industrialization

producing own products rather than importing it, to shift comparative advantage to non-primary sectors

urbanization

move from low-wage, surplus labour rural sector to high-wages, productive efficiency urban sector

kuznet's curve

hypothesis that inequality will first get worse and then get better

lewis model

economic model that predicts rural-urban migration as a source of economic growth

endogenous growth theory

economic growth model that says economy will grow as a result of technological innovation

demographic equation

(b-d)+(i-e)

total fertility rate

how many children a woman could have throughout fertility period , avg. 2.3

replacement rate

amt of children a couple needs to have to replace themselves, avg 2.1

infant mortality rate

# of deaths of children under 1 / yr : sensitive to socioeconomic conditions

life expectancy

how many years one is expected to live given obstacles

rate of natural increase

b-d

doubling time

70 / %growth rate

high stationary

high birth high death

transitional

high birth falling death

late expanding

birth increasing at decreasing rate, low death

low stationary

low birth low death

hidden momentum of population growth

absolute pop can fall but still grow as young ppl become older and are parents

how to decrease fertility rate

- later longer fewer: space out births
- fund womens education and family planning
- invest in health
- coercive methods i.e. china

pull factors

higher wages, political stability, more job opps, better life

push factors

low wages, political instability, less job opps, worse life

272

million migrants

26

million refugees

migrant flows

south-north, 40%
south-south 33%

consequences of migration

1. taxes = net gain
2. key sectors are employed
3. brain drain
4. brain gain / remittances
5. well being improves in s-n, not s-s

resource scarcity substitution cycle

new resource -> demand goes up -> reserves exhausted (supply down) -> resource scarcity > r+d, prices rise (demand down) -> substitution

renewable resources

flow, public good, measured by sustained yield

non-renewable

stock, private good, measured by reserves

sustainability

how to extract resource in long term

sustained yield

how many fish can we take out of this lake to not jeopardize their population

proven reserves

how much we could extract at current prices

estimated reserves

how much we expect exists in the world

potential reserves

how much we could extract if prices went up

carrying capacity

max amt of resources we need to maintain pop

malthusian view

problem: population bomb
solution: population control
carry capacity: fixed

marxist view

problem: distribution of resources
solution: redistribution
carrying capacity: not fixed

ultimate resource view

problem: current institutions
solution: human ingenuity
carrying capacity: not fixed

5 roles of agriculture

1. intl trade: rise in last 20 yrs
2. employment: 1/3 of labour force
3. source of nat. revenue: 5% of GDP
4. livelihood, generates surplus
5. environment: 35% of land dedicated to ag

subsistence farming

small scale, personal consumption, low inputs low yield

cash-cropping

diverse scale, commercial + personal consumption, variable inputs + yield

industrial

large scale, commercial consumption, high inputs high yield, capital intensive

agricultural intensification

using same inputs to get higher yield: induced innovation