The global economy is defined as a collection of interdependent country economies. The system binds them together:
- international labour division;
- political and economic relations system
Before it took on its contemporary shape, the global economy had progressed a long way. Thus, the international economy began in the 15th century, evolved rapidly from the 17th to the 19th centuries, and finally appeared in the mid-nineteenth century. From the second part of the twentieth century until the present, the world economy has been in a modern stage of development.
The Core Of The Global Economy
All countries’ national economic complexes are included in the global economy.
The interaction of the pieces that make up this system, namely national economies, is its defining feature. This contact is characterised by stable connections, which enable a productive reproduction process.
The Global Economic Framework
The international division of labour, often known as MRI, is the foundation for this notion. This is the word given to the specialisation of various states in any activity.
The factors listed below are at the heart of MRI.
Natural, technological, and economic factors include natural resource reserves, geographic position, and climatic conditions, among others.
Relations between countries that have developed historically in terms of socioeconomics and politics. This encompasses religious beliefs and widely held ideologies.
MRI can be broad, and then countries are classified as follows:
It can also be personal: in this situation, we’re discussing labour division in several industries:
- livestock husbandry, for example.
Finally, a single MRI is regarded as a division of labour within a single organisation.
Indicators Of The Global Economy’s Progress
To objectively depict the current economic situation, some indicators are used.
The statistics of GNP and GDP, or gross national and gross domestic products, are the most essential.
GNP is defined as the market price of goods and services produced over a specific time period. Annual data is usually collected. At the same time, things can be manufactured in other countries, but by domestic companies.
GDP is a metric that represents the value of goods produced on a country’s territory, regardless of whether the production elements are owned by the country’s residents or not.
Trends In The Global Economy’s Development
The following are some of the major patterns in international economic development since the twentieth century:
Globalization, that is, the strengthening of the interaction of the international economy’s issues;
Internationalization of the economy, production: reproduction is not limited to national borders;
Scientific and technological progress: this is a continuous process of discovery as well as the application of new knowledge in practise, which allows for the creation of high-quality products at a low cost of resources.
Transnationalization refers to the expansion and strengthening of multinational corporations, as well as the international control and operation of these corporations.
International economic integration is a transition from an industrial to a post-industrial society characterised by a high level of education, a predominance of services in consumption and production, and a new vision of labour; post-industrialization is a transition from an industrial to a post-industrial society characterised by a high level of education, a predominance of services in consumption and production, and a new vision of labour.