INTERDEPENDENCE OF CORE, PERIPHERY, AND SEMI PERIPHERY

• The world is connected more than ever before through globalization and free trade agreements

  • Free trade agreements can either be fair between two countries, or set core and developing countries wider apart with widening income disparities.

Comparitive advantage - The relative cost advantages for producing certain goods and services for trade

--> its better for them to trade what they are specialized in rather than to try to use it in their own market as itll be cheaper when 2 countries will trade things they are specializied in to gain what they don't have

• Countries don’t have to make everything themselves.

• Affected by labor costs, capital, and technology.

Complementary advantage - When trade is mutually beneficial for both countries, as they are trading for things the other has a lot of demand for with the right supply

• Affected by distribution of resources and variation, relationship between core, S.P and P.

conditions for trade

• It’s cheaper for someone else to provide it in a more specialized way rather than making a product yourself with less skill and a lot more expensive.

INTERDEPENDENCE - core countries need raw material for production while periphereal country needs manufactured good.

• This can lead to commodity dependence in peripheral countries.

  • The commodity is necessary for the economy, so they’ll be super dependent on it

commodity dependence may lead to a frozen state of undeverlopment

NEOLIBERAL POLICIIES - Beliefs open markets and free trade will lead to a developed world.

• Two characteristics of capitalism

beliefs

• will lessen tensions.

• worldwide development

• support for common markets

• spread democracy and human rights.

• discourage political interference with economic systems.

• interdependence has boosted this.

NAFTA (USMCA) - Free trade agreements and neoliberal policies reducing the trade barriers with a common set of trading rules.

• UMSCA is the reason why there have been a lot more imports and exports between the countries.

globalization and trade increase efficiency and opening new markets, lesser poverty, higher global economic growth, more jobs and improved quality of life

WTO - supranational organization with 164 member countries, providing governments with forums to negotiate trade agreements, settle disputes, and oversee trade rules

• Helps trade flow as freely as possible.

INTERNATIONAL MONETARY FUND - 189 countries organization enabling countries and citizens to conduct business with each other.

THE WTO AND IMF ARE CONTROVERSIAL

they give tariffs for stupid reasons and they involve politics too much, giving core countries an advantage

IMF makes loans to countries as long as they follow a set of instructions, but critics argue this damages the autonomy of a country

negatives

• It benefits core countries mostly

• hurts economies with high commodity dependency

• have created inequality in a region

• countries with less skilled workers are encouraged to keep their workforce less skilled

• • pollution and + exploitation

supranational organizations have been made to support neoliberalism, improve economic development by removing trade barriers within the countries examples: Mercosur, NAFTA, SADC, EU

How has globalization led to deindustrialization?

DEINDUSTRIALIZATION

• Many core countries today have an aging infrastructure

• These core country's economies cannot compete with the new high tech manufacturing sectors found in the semiperiphereal countries.

  • Causing a shift in core countries, focused more on the service sector than the manufacturing sector.

• Deindustrialization has led to more tertiary sector jobs with lower incomes and fewer benefits to core countries

• Deindustrialization has led to an interdependence between core and semiperiphereal countries by creating global supply chains

EFFECTS OF DEINDUSTRILIZATION

• long term and unintended consequences for local areas in the core and periphery

• loss of jobs in the industrial sector and rising unemployment

  • When a plant closes, so do the businesses directly supported by the plant, causing a chain reaction of closure of different businesses.

GOVERNMENT TRADE POLICIES

The private sectors play important roles to economies of a country, are the drivers of economic growth This is true as they determine the relationships with the suppliers and customers, operating within zoning established by the government.

Governments SHOULD be regulating banking industry establishing trade and policies to provide corporations with an environment conducive to doing business.

• Interest rates affect lending affect lending to businesses and consumers, impacting job creation.

Governments seek to increase economic development by applying policies

• Businesses will take advantage of the economies of scale in the workforce, thus locating together and agglomerating.

questions:

How does economies of scale help businesses>>?

Governments will also try to develop growth poles - places of economic activity clustered around one or more high growth industries stimulating economic growth.

• Silicon Valley

• so, the high growth industry will help related businesses <-- i THINK THIS HELPS WITH AGGLOMERATION??

• state and local governments may seek to attract new business by lowering corporate taxes or offering special tax incentives.

• governments will try to ensure the best possible environment to do industry by giving incentives, training programs, improved infrastructure, etc.

National governments encourage economic development through the use of tariffs.

• tariffs encourage local producers to sell stuff at cheaper prices, helps create more jobs and possibly pay workers more.

though tariffs are beneficial to countries on the inside, they limit neoliberalism

• quality and innovation can suffer when there is less competition in the market.

• an eye for an eye, if there is a country that imposes tariffs on another, that country will give that country tariffs.

China America trade war

• Affected workers and increased unemployment to both countries, also affecting global supply chain.