The Structures of

Globalization and
Global Economy
Group 1
 Objectives
• To have knowledge of the structure of globalization.
• To agree on a working definition of globalization.
• To define economic globalization.
• To have knowledge of the various trading system.
Structure of Globalization
 Negative Effects of Globalization

• More carbon emissions

• Violence
• Diseases
• H1N1
• Ebola
 Globalization: A Working Definition

• Globalization refers to the growing worldwide linkages

of economics, culture, and people, which yields a global
consciousness.
 Globalization from the ground up

• Arjun Appadurai
• Multiple Dimensions of Globalization
• Scape
 Scapes

• Ethnoscape
• Mediascape
• Technoscape
• Financescape
• Ideoscape
 International Trading System

Economic Globalization -

International trade – is an exchange

of goods and services
across country borders.
 Types of International Trading System

• Bilateral Trade

• Multilateral Trade
 Importance of International Trading System

• It raises living standards

• Provides employment
• Enable consumers to
enjoy a greater variety of foods
Disadvantages of International Trading System

• One country can profit greatly from it by exporting but

not importing.
• Can be used to undercut domestic markets by offering
cheaper but equally valuable goods.
 The Bretton Woods System

• It replaced the gold standard with U.S. dollar as the global

currency.

• Allows government to freely and actively manage their

economies.
 The Bretton Woods System

• The Bretton Woods System of Monetary established the

rules of commercial and financial relations among:

U.S. Canada Western European Countries

Australia Japan
 Neoliberalism

Neoliberalism is a policy model—bridging politics, social

studies, and economics—that seeks to transfer control of
economic factors to the private sector from the public
sector.
The Global Financial crisis and the challenge to
Neoliberalism
• Crisis - is any event that is going (or is expected) to lead
to an unstable and dangerous situation.
• Global Financial Crisis
 Global Financial Crisis of 2007 – 2008
• Russia
• Shock Therapy of Neoliberalism
Traced back in 1980s
• Cheap Housing Loans
• Building houses beyond their financial capabilities.
• Mortgage backed securities (MBSs)
 Global Financial Crisis of 2007 – 2008
In 2007 The crisis spread beyond US.
• Home prices stopped increasing • Asian Markets
• Result in rapid reselling of MBS • Foreign Government Investors
• Reached a tipping point in mid • Corporations
2008. Prevent collapse of the World Financial
Lehman Brothers System.
• 4th largest investment bank in US
 Global Financial Crisis of 2007 – 2008

• U.S. recovered quickly

• Keynesian-style stimulus
 Economic Globalization Today
• Global financial crisis will take longer to resolve.
• Exports and other form of free trading are essential to the
countries in third world.
• Trade Liberalization
• Trade Imbalance
• Transnational Corporations