Economic interdependence
Elements of interdependence
Trade: goods, services, raw materials, energy Finance: foreign debt, foreign investment, exchange rates Business: multinational corporations, global production
Carbaugh, Chap. 1
Economic interdependence
Economic interdependence
Waves of Globalization
1st wave: 1870-1914
Falling tariff barriers improved transportation
Economic interdependence
Exports (% of GDP)
68% 48 46 45 35 29 28 28 11 11
Imports (% of GDP)
62% 30 41 39 34 27 30 30 14 10
5
Economic interdependence
Value of US exports ($ bill.) $202.4 125.2 98.4 45.2 30.6 16.4 28.9 17.9 9.0 17.9
Value of US imports ($ bill.) $250.1 147.9 165.3 74.3 40.6 31.0 15.0 12.8 19.2 9.7
6
Economic interdependence
Interdependence: Impact
Overall standard of living is higher
Access to raw materials & energy not available at home Access to goods & components made less expensively elsewhere Access to financing and investment not available at home International competition encourages efficiency
Carbaugh, Chap. 1 7
Economic interdependence
Carbaugh, Chap. 1
Comparative advantage
Carbaugh, Chap. 1
Economic interdependence
Comparative advantage