Chapter 2 Changing Geographies of the Global Economy

Review Concepts to Review – Globalization, core−periphery economic geography Key Words – Geographies of globalization, FDI, volatility of economic growth, transnational corporations, global cities

Global Division of Labour Over 300 years, a global division of labour developed, with a core−periphery configuration Manufacturing concentrated in the core, with exports and imports to/from periphery WWII: destruction of extant manufacturing capacity, and development of new technologies Post-war division: – Capitalist ‘West’ dominated by the US – Communist ‘East’ – ‘Third World’ Post-Cold-War developments: the re-emergence of Asia as the world’s most dynamic economic region

Global Interconnectedness Two important features of the global economy since 1950: – Increased volatility of economic growth – Growing interconnectedness Current trends: – Variation between countries in trade integration terms – Major indicator of growing interconnectedness: the fact that the growth of trade has outpaced the growth of output – Most trade is intra-regional within the three major regions (Europe, North America, Asia), and most exterior trade is between them

FDI and TNCs FDI – Definition – Importance of FDI to a country’s economy as a measure of integration TNCs – Definition – Significance of intra-firm trade Changing patterns of trade and investment

Regional Comparisons USA Europe Eastern Europe Asia Latin America ‘Global cities’ as nodes in the networks