1 economÍa mundial 2. globalization. 2 outline what is globalization? forces behind globalization...
Post on 21-Dec-2015
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TRANSCRIPT
2
OUTLINE
What is globalization?
Forces behind globalization
Is globalization new, irreversible and complete?
The costs and benefits of globalization. Challenges and opportunities
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WHAT IS GLOBALIZATION?
Semantic problem: globalization is a term with multiple meanings…
… because we are referring to a multifaceted phenomenon
GLOBALIZATION: is a historical process of increasing integration of countries around the world, particularly through economic flows across borders. It also includes the movement of people, knowledge and culture across international borders.
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FORCES BEHIND GLOBALIZATION
Two main forces Innovation and technological progress Financial and trade liberalization
Both forces work together to cut transaction costs associated with international flows
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TECHNOLOGICAL REVOLUTION
We are in the midst of an all-purpose technological revolution based on ICT technology (computers, software, internet, telecommunications)
Similar to previous technological revolutions (railroad, automobile, electricity,…)
A main difference: rapid rate of diffusion at a global level
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LIBERALIZATION
After World War II Bretton Woods institutions (IMF, WB, GATT) Achieving peace through global prosperity Trade and financial liberalization
Political and civil liberties have simultaneously expanded with economic liberalization
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TRADE LIBERALIZATION
In 1947 the average tariff on manufactures in the industrial countries was over 40 percent. By 2000, they had been lowered to less than 5 percent
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EXPANSION OF POLITICAL FREEDOM AND CIVIL LIBERTIES
Libertades políticas en el mundo, 2009
Libres46%
Parcialmente libres30%
no libres24%
Libertades políticas en el mundo, 1973
Libres29%
Parcialmente libres28%
no libres43%
Source: Freedom House
Percentage of free (libres), partially free and non free countries (1973 and 2009)
Worldwide expansion of liberal democracy
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TRANSACTION COSTS REDUCTION
Liberalization, economic and political freedom, and technological innovation lead to international integration through a reduction of transaction costs
Distances shrink. “The world is flat”
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TRANSACTION COSTS REDUCTION
La Reducción de los Costes del Transporte
(medidos en dólares EEUU constantes, 1990)
0
20
40
60
80
100
120
1930
1940
1950
1960
1970
1980
1990
2000
Fuente: FMI
Fletes marítimos
Transporte aéreo
La Reducción de los Costes de Comunicación
(dólares de EEUU constantes, 1990)
0
20
40
60
80
100
120
1930
1940
1950
1960
1970
1980
1990
2000
Fuente: FMI
Coste de las llamadas telefónicas Coste del uso
de satélites
Transportation costs reduction: sea-freights and air-freights
Communication costs reduction: phone calls and satellite use
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MISUNDERSTANDINGS ABOUT GLOBALIZATION
Globalization is new
Globalization is irreversible
Globalization is complete
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FIRST WAVE OF GLOBALIZATION (1870-1913)
Factors fuelling integration Pax Britannica Monetary stability (gold standard) Developments in transport and
communications Labor shortages and surpluses
(migration) Productivity and economic growth
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FIRST WAVE OF GLOBALIZATION AND TRANSPORTATION COSTS
Intercontinental
trade integration
Change in
price
differentials
Due to
Lower
transportation
costs
Lower tariffs
and trade
barriers
Disintegration of the world economy
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FIRST GLOBALIZATION: DEEP FINANCIAL INTEGRATION
Financial and trade integration
Exports/GDP
Foreign assets/GDP
Exp
orts
/GD
P
For
eign
ass
ets/
GD
P
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FIRST GLOBALIZATION: MIGRATIONS
1850-1910: 60 million people migrate from Europe to America (50% to USA)
1850-1920: around 50 million people move from China and India.
Labor flows (workers migrations) explain 60% of the reduction in wage differentials between Europe and America
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DISINTEGRATING FORCES
Several forces work against globalization Political conflicts (World Wars) and
ideology (North Korea) Economic crises (Great Depression) Xenophobia Discontent over the process and
results of globalization
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AN INCOMPLETE PROCESS
Home bias in trade Feldstein-Horioka puzzle The purchasing power and exchange
rate disconnect Effects of exchange rates
Equity home bias puzzle Limitations on international migrations Prevalence of non tradable goods and
services