4.1 - GLOBALISATION Flashcards
Globalisation
the process in which national economies have become increasingly integrated and inter-dependent
causes of globalisation
-trade liberalisation
-trading blocs
-growth of MNC’s
-Technological advancements (internet)
-Mobility of labour and capital
pros of globalisation
lower prices
benefits of trade
greater employment
benefits from large economies of scale
free management of labour and capital
technological transfers and innovations
cons of globalisation
growing inequality
higher structural unemployment
environmental costs
trade imbalances
greater rise of external shocks
less cultural diversity
specialisation
the concentration of a worker, firm, region or country to produce a narrow range of goods and services
only works if trade is successful (a means of exchange, monetary payments between agents)
reduces problem of scarcity (we can import goods we don’t have from other countries)
advantages of globalisation
-larger range of goods and services
-greater output and greater quantity
-trade and growth
disadvantages of globalisation
-finite resources
-over-reliance on good weather
-changing tastes
-nation interdependence
-de-industrialisation
HDI - human development index
what does it take into consideration?
-longevity (life expectancy)
-knowledge (adult literacy, school enrolment)
-standard of living (GDP per capita)
values of HDI
-0-0.49, low development
-0.5-0/69, medium development
-0.7-0.79, high development
> 0.8, very high
why HDI is good
1) broad measure, includes 3 factors
2) focus on development outcomes
3) allows for progress measured over time
4) attention focus on those with low development (can help with aid)
why HDI is bad
1) distribution of income
2) arbitrary weighting
3) freedom and choice
4) other factors → crime, poverty, negative externalities not included
institutional factors of development
healthcare, education, infrastructure
education
1) education
advantages
-productivity
-jobs, incomes
-gender equality
-health
-technology
disadvantages
-funding
-underlying problems
healthcare
advantages
-productivity
-jobs
-standard of living → happiness
-sanitation and drinking water
disadvantages
-funding
-price
infrastucture
-access to markets
-access to school/hospital
-FDI
disadvantages
-funding
