Uczelnia Łazarskiego Fall 2011

Economic integration and globalisation as natural phenomenon of development?

Globalisation – Definition

Globalisation – the increased global sourcing of goods and services, global flow of capital and importantly labour /Gordon Brown/

Globalisation describes the parallel emergence of three new forces:

The first is the information and communication revolution

The second is the world wide movement from the planned economies to market economies and from self-reliance to integration within the global economy

The third is the entry to the world economy of vast new sources of hard working and highly motivated but cheap labour

/Martin Wolf, Financial Times/

• Determinants of globalisation:

• Technological revolution

• Easing of barriers to international trade

• Freedom of labour movement

• Gold standard system

Rapid economic growth

Technological revolution

* Decreasing costs of transportation and communication due to technological developments

* Steamships became more and more important compared to sailing ships, hence decreased time of delivery

* Emergence of railroads networks

* Faster transmission of information due appearance of telegraphs as opposed to regular mail

“Shrinking globe” phenomenon

* “Most favoured nation treatment” introduced by the UK. It established the sovereign equality of states with respect to trading policy.

* Gradual reduction of barriers to trade as well as better protection of property rights

* Decline in barriers to trade of manufacturing products at first

* There was a free labour movement among the countries since people had no passports, except for Russia and Turkey

* Shift from agricultural to industrialised manufacturing sector that was in need of more people

* In 1891 Publication of Pope Leo XIII's foundational document, Rerum Novarum, also known as "On the Condition of the Working Classes“ that advocated workers’ rights, minimum wage, length of work day

* The idea behind that system was to convert paper currency into gold on demand of fixed exchange rate

* Exchange rate was based on parity and the currency costed more if had more gold in its reserves

* It brought balance-off-trade equilibrium for all countries and reduced uncertainty in trade, hence accelerating it

Stages of economic integration

• Free trade area

• Customs union

• Common market

• Currency area

• Political union

Date: 2015-01-11; view: 973