pt 2 GEC

Global Economy

According to Cambridge Dictionary, it is the system of industry and trade around the world

that has developed as the result of globalization the way in which economies have been developing to

operate together as one system.

Expansion of International Trade

Countries increasingly buy and sell goods and services beyond their borders, allowing

them to specialize in products they can produce efficiently while importing those they cannot.

Free flow of capital

Economic globalization allows money and investments to move more freely across

countries. Investors can purchase stocks, establish businesses, or finance projects in foreign

markets. This increases access to financial resources and promotes international business

expansion.

trade Liberalization

Trade liberalization refers to the reduction or removal of barriers to international trade,

such as tariffs, quotas, and restrictive regulations. By making trade easier, countries encourage

greater economic cooperation and competition.

Government

they create the policies and legal frameworks that regulate international

trade and investment. They negotiate trade agreements, impose or remove tariffs, protect

domestic industries, and establish economic policies that influence participation in the global

economy.

Transnational Corporations (TNCs) and Multinational Corporations (MNCs)

the primary engines of economic globalization by organizing

global supply chains, controlling massive capital flows, and diffusing technology across

borders.

International Organizations

they promote cooperation among countries by establishing

rules, resolving trade disputes, providing financial assistance, and encouraging economic

development.

International Monetary Fund

Monitors global

monetary systems, provides emergency short-term loans to

nations facing currency crises, and enforces economic reform

policies.

The Word Bank

Provides long-term loans, grants, and

technical assistance for infrastructure and poverty reduction

projects in developing countries.

World Trade Organization

Sets the legal rules for

international commerce, reduces trade barriers, and arbitrates

trade disputes between member states.

Modern World-System Theory

explain how the global economy functions as a single interconnected system.

The Three tier Geographic Hierarchy

The central idea of World-System Theory is that capitalism operates on a global scale

rather than within individual countries.

Core Nations

the wealthiest, most industrialized, and most technologically advanced

nations.

Semi-Periphery

Act as a buffer zone between core and periphery nations

Periphery Nations

Generally less industrialized and economically dependent on core

countries