Globalization - The increasing integration of economies through international trade.
Anti-Globalization Movement - An organization that blames globalization for environmental degradation and income inequality in favor of corporate profits.
Pre-Industrial Trade (Romans, Silk Road (206 BC - 220 AD), Opium Wars)
Industrial Revolution
Post World War II
Silk Road
The Silk Road was a series of trade routes used for more than 1,500 years from China to Europe. It represents a symbol for the exchange of goods and culture.
Sugar Road
Starting in Nagasaki, where trade with the rest of the world was limited, sugar was imported for the first time. Different regions began experimenting and creating their own baked goods.
Dejima
Dejima is an artificial island created in 1636 that allowed the Dutch to trade with Japan. There were very strict regulations against trade at the time and Japan was mostly isolated from the rest of the world.
Dejima
WTO Protest
WTO
WTO
Turtles
Increased globalization has also lead to origins of production. Many parts and labor for consumer goods require production all over the world. - American Automobiles: Cars assembled in U.S. use parts produced internationally - iphone: Intellectual property is developed in U.S. and produced in China - Computer Systems: Parts are made all over the world
Protectionism - Restricting international competition by using tariffs or quotas.
Interdependence - The relationships among nations
Large countries can survive on domestic production entirely but can benefit from trade. Small countries are much more reliant on trade. - Exports - Goods that are produced domestically and sold internationally - Imports - Goods that are produced internationally and sold domestically
\[ \begin{align*} Y & = C + G + G + NX \\ NX & = EX - IM \\ EX & = \text(Exports) \\ IM & = \text(Imports) \end{align*} \]
\[ \begin{align*} EX > IM & = \text(Trade Surplus) \\ EX < IM & = \text(Trade Deficit) \\ EX = IM & = \text(Trade Balance) \end{align*} \]
International Trade Theory - Analyzes the benefits and gains from trade
Balance of Payments - A record of economic transactions between the domestic country and the rest of the world.
Foreign Exchange Markets - Markets used to exchange currency from country to country