Reviewing Globalization

Objectives Review basic economic principles. Review key trade agreements & agencies. Review issues and controversies surrounding globalization.

Warm Up What is economics? –Way in which we manage limited resources to meet unlimited needs –Market Free choice, competition, limited govt role –Command Govt decides, controls Security over risk –Traditional Custom dictates Support selves

Review What is globalization? –Growing integration of the world’s economies and societies. –New communications technology –Free trade, open currency markets, privatization

Trade Agreements and Regulating Bodies Regional Trade –NAFTA –EU –AU –ASEAN International Trade –IMF –World Bank –WTO

Trade Agreements and Regulating Bodies International Monetary Fund (IMF) –Short term loans to countries in economic crisis World Bank –Financial aid for long-term development World Trade Org. –GATT –Promote & monitor free trade among member nations –Settle disputes

Globalization: Issues and Controversies National Sovereignty Loss of Cultural Identity Free Trade or Unfair Trade Globalization & Human Rights Globalization & Migration Emerging Powers Global Economic Crisis

Global Pool of Money –How did world invest in US housing market? Mortgage Backed Securities –Problem? Not enough mortg’s = Lowered standards (NINAs) Default / Foreclosure = securities worth less Stock Market “Crash” = banks / financial co’s bankrupt Credit crunch (no loans for cars, school, house, small business) Unemployment –Fix? TARP & Govt bailouts Overhaul / Regulate system

Global Economic Crisis Global Impact US Crisis? –Global investors $1 trillion loss –Lower US interest rates = weaker dollar = declining profits for trade partners = decline trade

China- US Relations China’s economic rise –Mao? Collective Farm Fail –Deng? Eases controls, opens up Impacts of rapid growth? What is China’s impact on the world stage? What are BRIC nations?