The Global Economy: Difference between revisions
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So from the economic perspective good measurement is difficult and perhaps less easy to measure than social (e.g internet and social media traffic, migration), etc | So from the economic perspective good measurement is difficult and perhaps less easy to measure than social (e.g internet and social media traffic, migration), etc | ||
== Is globalization is an economic, social, political or technological phenomenon. Which ones are more important?== | |||
Revision as of 07:26, 13 January 2011
Do Individual Countries Matter and how difficult is it to measure Globalisation
Yes, countries do still matter but consider this in terms of the impact of Globalisation from an economic criterion and a country's ability to be isolated from the global economy, which might be describes as Economic Coupling/Decoupling.
Some examples
- 1. The Oil Shocks on the 1970's/1980's. The large run up in prices in '73 and '79 contributed to significant fall in UK GDP of between 3.5% and 4.5% as well as high inflation. The UK's and US's economic response could only mitigate the effects but not isolate them and in the next 20 years falling oil prices had a positive impact on economic growth.
http://www.bankofengland.co.uk/publications/inflationreport/ir09feb.pdf
- 2. Global Credit Crunch. If, as Gordon Brown tried to argue, Britain's recession was born out of the US subprime mortage crisis it indicates the the world's financial markets are so interdependent in terms of the free (or in this case frozen ) flows of credit that a bank's default in one country can impact the financial health of banks in another country (think Irish and Icelandic banks) regardless of the intervention of the nation's government. But "Global" credit crunch may be overstating it as Asian and Middle Eastern financial systems were not impacted as much and to a much greater extent decoupled from US than Europe. The initial global economic response was a concerted effort from the G20 countries to increase liquidity and stimulus. The longer term response, ironically, if for countries to adopt contrary economic polices e.g stimulus in the US and debt reduction in the UK.
Measurements of the increased level of Globalisation, I think, are actually very difficult to measure. Sutcliffe and Gynn (Handbook of Globalisation p61-p75) provide examples of some of the difficulties
- 1. Aggregated measures of Globalisation hide large variances between different industries and sectors. Eg Manufacturing and Service or Agriculture and Consumer Electronics
- 2. The assumption that the revenue of MNC's is a proxy measure for the level of globalized economic activity when the correct measure would be to count the added value to the product they contributed.
So from the economic perspective good measurement is difficult and perhaps less easy to measure than social (e.g internet and social media traffic, migration), etc
