Jan 02, 2016
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