Reviewing Globalization
Globalization Day 11
Objectives
• Review basic economic principles.
• Review key trade agreements & agencies.
• Review issues and controversies
surrounding globalization.
Warm Up
• What is economics?
– Way in which we manage limited resources to meet
unlimited needs
– Market
• Free choice, competition, limited govt role
– Command
• Govt decides, controls
• Security over risk
– Traditional
• Custom dictates
• Support selves
Review
• Key Terms
– Identify the term being
described in the pictures
you’ve been given.
Review
• What is globalization?
– Growing integration of the
world’s economies and
societies.
– New communications
technology
– Free trade, open currency
markets, privatization
Trade Agreements and Regulating Bodies
• Regional Trade
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NAFTA
EU
AU
ASEAN
• International Trade
– IMF
– World Bank
– WTO
Trade Agreements and Regulating Bodies
• Bretton Woods Conference
• International Monetary
Fund (IMF)
– Short term loans to
countries in economic
crisis
• World Bank
– Financial aid for longterm development
• GATT
• World Trade Org.
– Promote & monitor
free trade among
member nations
– Settle disputes
Globalization: Issues and Controversies
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National Sovereignty
Loss of Cultural Identity
Free Trade or UnfairTrade
Globalization & Human Rights
Globalization & Migration
Emerging Powers
Global Economic Crisis
Global Economic Crisis
• Global Pool of Money
– How did world invest in US housing market?
• Mortgage Backed Securities
– Problem?
• Not enough mortg’s = Lowered standards (NINAs)
• Default / Foreclosure = securities worth less
• Stock Market “Crash” = banks / financial co’s bankrupt
• Credit crunch (no loans for cars, school, house, small business)
• Unemployment
– Fix?
• Govt bailouts
• Overhaul / Regulate system
Global Economic Crisis
• Global Impact US Crisis?
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Global investors $1 trillion loss
Decline international trade
Drop US demand hurts growing economies
Lower US interest rates = weaker dollar = declining profits for
trade partners
– Fear of repeat in Eurozone = PIGS
Rise of China
• Deng’s Reforms
– Agriculture, foreign
invest, privatization
– Consequences?
• Why global power?
– Cheap manufactured
goods
• Issues w/US?
– Trade imbalance
– Currency wars
Handout
• 10 Things You Should
Know about
Globalization