The Growth of the International Economy 1820-2000: An Introductory Text

The Growth of the International Economy 1820-2000: An Introductory Text

The Growth of the International Economy 1820-2000: An Introductory Text

The Growth of the International Economy 1820-2000: An Introductory Text

Synopsis

This text is widely acknowledged to be the best available introduction to the study of the international economy as a mechanism for diffusing modern economic growth between nations. Updating the story to the present day, this edition covers the latest developments in international economics. Significant new additions include:* globalization and the world economy* the growth of regional trading blocs* globalization and financial crisis in Asia* transition to the market in post-communist economiesPacked with new references and data, The Growth of the International Economy is an indispensable guide to the world economy as it enters the new millennium.

Excerpt

The exchange of goods and services is the means through which independent economic units enter into economic relations with one another and become part of a local or national economic community. As exchange passes beyond a country’s boundaries, national economic systems become parts of a broader regional, continental or world economy. Flows of commodity trade are not the only economic links forged between nations, however. People are also highly mobile, and the long evolution of trade from primitive barter to our modern worldwide network of commodity exchange has made necessary an intricate system of international credits, loans and investments. It is these flows of trade, labour and capital that constitute the vital processes of the international economy. Obviously, therefore, any study of the growth of the international economy must be concerned with the measurement and comparison of the rate at which these processes go on over time. It must also be concerned with examining the ways in which the international economic system is organized to carry out these vital processes, and how the structure, organization and functioning of these processes change as the international economy expands. In the final analysis, however, the international economy is studied not as an end in itself, but rather as a means to an end, for in studying its expansion in recent times, we are analysing one of the most potent causes of modern economic growth.

The international economy encourages national economic growth in two ways: by providing opportunities for international specialization; and by acting as a mechanism for diffusing between nations the apparatus and/or benefits of modern industrial technology. Since specialization implies trade and cannot occur without it, and since specialization and division of labour are a major cause of increased productivity and rising per capita real incomes, some comment is called for on the nature of the basis of trade between countries before we say something briefly about the international economy as a means of spreading industrialization.

International trade arises simply because countries differ in their demand for goods and services and in their ability to supply them. So far as supply is concerned, the basis for trade is to be found in the uneven distribution of

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