Question

What are the main risks faced by globalization in general and international trade in particular? I mention some examples of these risks. ؟What are the basic determinants of the international economy that will be mainly affected by the three shocks that globalization has received in the past two decades? How this will affect global economic growth -What options does the world stand for today, and whether it will lead to a strengthening of international trade and revive globalization

Answer 1

The integration of national economies into a global economies system has been one of most important developments of the last century. This process of integration, often called Globalization, has materialized in a remarkable growth in trade between countries.

The chart here shows the value of world exports over the period 1800-2014. These estimates are in constant prices (i.e. have been adjusted to account for inflation) and are indexed at 1913 values.

This chart shows an extraordinary growth in international trade over the last couple of centuries.. Exports today are more than 40 times larger than in 1913.

You can click on the option marked' linear', on top of the vertical axies, to change into a logariphmic scale. These will help you see that, over the long run, growth has roughly followed an exponential path.

Examples of Globalization:

• Economic globalization: is the development of trade systems within transnational actors such as corporations or NGOs;
• Financial Globalisation: can be linked with the rise of a global financial system with international financial exchange and monetay exchange. Stock markets, for instance, are a great example of the financially connected global world since when one stock market has a decline, it affects other markets negatively as will as the economic as a whole.
• Cultural globalization: refers to the interpenetration of cultures which, as a consequence, means nations adopt principles, beliefs, and customes of other nations, losing their unique culture to a unique, globalized supra-culture.
• Political globalization: The development and growing influence of international organizations such as the UN or WHO means governmental level. There are other bodies operating a global level such as NGOs like Doctors without borders or Oxfam;
• Technological globalization: The phenomenon by which millions of people are interconnected thanks to the power of the digital world via platforms such as Facebook, Instagram, Skype or Youtube.
• Geographic globalization: is the new organization and hierarchy of different regions of the world that is constantly changing. Moreover, with transportation and flying made so easy and affordable, apart from a few countries with demanding visas, it is possibal to travel the world without barely any restrictions;
• Ecological globalization: Accounts for the idea of considering plant Earth as a single global entity - a common good all societies should protect since the wheather affects everyone ane we are all protected by the same atmosphere. To this regard, it is often said that the poorest countries that have been polluting the least will suffer the most from climate change.