Figure I Firm decision tree and book overview
Part I
Introduction
Firm in Home
serve foreign markets / source from abroad?
no
yes, source from abroad
yes, serve
foreign market
Part II
Firms, trade,
and location
Stay
domestic
Export or
local production?
Import or
local production?
export
local
production
Part III
Capital, currency,
and crises
Export
Part IV
Consequences
of globalization
Multinational activity:
horizontal
local
production
Multinational activity:
vertical
Economic consequences
import
Import
Figure 1.1 ‘Big Bang’ and beyond
big bang
present time
13.7 billion years
10 billion years
200 million years
5 billion years
3.5 billion years
3 billion years
2 billion years
800 million years
beginning of our galaxy
first stars
beginning of our solar system
200 million years
beginning of the geologic eras
oldest know n fossil
beginning of photosynthesis
end of precambrian era
end of primary era
Data sources: Louis Henri Fournet (1998) and the website http://www.nasa.gov, ‘A baby picture of the universe
tells its age’, 11 February 2003.
Figure 1.2 Development of world population over the last 2,500 years
7000
7000
6000
population (million)
5000
4000
3000
30 years war, Ming collapse
2000
Data sources:
Kremer (1993,
table 1) and
UN Population
Division World
Population
Prospects:
The 2010
Revision.
Black death
Mongol invasions
1000
265
170
425
0
-500
0
500
year
1000
1500
2000
Figure 1.3 Development in world population, UN projection to 2100
world population (billion)
10
8
6
4
2
0
1900
1940
1980
2020
year
2060
Data source: UN Population Division World Population Prospects: The 2010 Revision, medium variant
2100
Figure 1.4 GDP and GNP, current $, 2010
GNI (current US $, bn)
100,000
10,000
USA
Japan
China
Germany
1,000
100
Luxembourg
10
10
100
1,000
10,000
100,000
GDP (current US $, bn)
Data source: World Bank Development Indicators Online; data are for 167 countries; the thin line is a 45° line;
bubbles proportional to size of GDP; double logarithmic scales.
Figure 1.5 Correction of GDP per capita for purchasing power, 2010
PPP international $
100,000
10,000
1,000
100
100
1,000
current US $
Data source: World Bank Development Indicators Online.
10,000
100,000
Figure 1.6 Development of world per capita income over the last 2,000 years,
logarithmic graph
10,000
World GDP per capita
7614
1,000
566
467
666
453
100
0
500
1000
year
1500
Data source: Maddison Historical Statistics 1-2008 AD; 1990 international Geary-Khamis dollars
2000
Figure 1.7 Advantages and disadvantages of logarithmic graphs
Logarithmic graphs
10,000
A3
1,000
C1
100
C3
B1
B3
B2
10
A1
1
1950
1960
1970
1980
1990
2000
Figure 1.8 Leaders and laggards in GDP per capita: a widening perspective
400 % above
world average
Switzerland
USA
Australia
(world = 100)
Netherlands
UK
200
Italy
1900
2000
Other
Africa
(country = 100)
1800
New Zealand
-400 % below
world average
1700
Australia
New Zealand
-200
1600
1500
Western
Offshoots
Many
Many 1000
Italy
Western
Offshoots
1
Iran
Iraq
India
China
Data source: Maddison Historical Statistics 1-2008 AD;
deviation relative to world index = 100 for positive and country
index = 100 for negative deviations.
Iraq
Figure 1.9 Carrying capacity of European merchant fleets, 1470–1780, metric
tons
Carrying capacity of merchant fleets, 1470-1780
1,000,000
800,000
600,000
400,000
200,000
0
1470
Netherlands
Germany
1570
Britain
1670
France
1780
Italy, Portugal, Spain
Data source: Maddison (2001, p. 77); absence of a bar in a year for a particular country /group indicates that no
data are available.
Figure 1.10 Two ‘waves’ of globalization, merchandise exports, per cent of GDP
Merchandise exports, % of GDP
25
World
USA
22.8
Japan
20
18.7
15
11.3
10
5
4.6
2.5
0
1870
1890
1910
1930
1950
1970
1990
2010
Data sources: Maddison (2001, table F-5) in constant 1990 prices, extended to 2010 using WTO International
Trade Statistics and World Development Indicators Online.
Figure 1.11 Trade and market integration
price
1
Foreign
export
supply
pbH
paH
pc
pbF
pa F
C
B
A
1
Home
import
demand
1
2
qa
qb
qc
quantity
Figure 1.12 London external bond spread, 1870–1940, fourteen core and
empire bonds
10
5
0
-5
-10
1870
1880
1890
1900
1910
1920
Source: Based on Obstfeld and Taylor (2003); the units are percentage points.
1930
1940
Figure 1.13 Foreign capital stocks; assets/world GDP, 1860–2000
Foreign capital stocks; assets / world GDP
0.6
0.4
0.2
0
1860
1880
1900
1920
Source: Based on Obstfeld and Taylor (2003).
1940
1960
1980
2000
Figure 1.14 Relative migration flows, Western Europe and Western Offshoots,
1870–2010, per 1,000 inhabitants
6
4
2
0
1870-1913
1914-1949
1950-1973
1974-1998
2000-2010
-2
Western Europe
Western Offshoots
Data sources: Net migration in the period (Maddison, 2001, table 3-4) is divided by the (simple) average
population and length of the period, normalized per 1,000 inhabitants; updated for the period 2000-2010 with data
from UN Population Division, Migration Section; Western Europe consists of Belgium, France, Germany, Italy,
Netherlands, Norway, Sweden, Switzerland, and UK.
Figure 1.15 Traditional and globalized fragmented production processes
I. traditional production process
production
block
country A
firm 1
inputs
markets
II. globalized fragmented production process
inputs
inputs
production service
production
link
block 1
block 2
country A
country B
firm 1
firm 1
service
link
service
link
production
production
block 3
block 4
country C
country A
firm 2
firm 1
service
link
inputs
inputs
markets
Figure 1.16 Change in night light intensity on the Korean peninsula, 1992-2008
Source: Henderson, Storeygard, and Weil (2011), reprinted with permission