Economic Growth and Globalization since 1850

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Economic Growth and Globalization since 1850. The Age of Globalization. Exponential change. I. Introduction: A. Global time line. B. Successive Shifts of Power 19th-21st Centuries. II. Stages of Economic Growth.
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EconomicGrowth and Globalizationsince 1850 The Age of Globalization
  • Exponential change
  • I. Introduction: A. Global time line B. Successive Shifts of Power19th-21st Centuries II. Stages of EconomicGrowth
  • How did the world progressively enter into a system of production of wealth?
  • A. 19th CenturyEconomicGrowthsince 1850
  • Since 1850, continualacceleration of technicalprogress and strongeconomicgrowth
  • Sustaineddemographicgrowth
  • Inequalitiesin development continue
  • 3 stages of economicgrowth
  • Entering a world of intensive growth
  • Increasingworld growthafter1945
  • Capitalism in Crisis
  • 1st Stage: Intensive Growth
  • From the 18th Century, western European countries, facingrapidincrease in population growth, beginindustrializing
  • Intensive growth= wealth production surpasses basic needs of the population Capitalism, well-established in the 19th c. in Europe, contributes to this trend Despite the rise in global population, economicgrowthenabledimprovement in standard of living. 2nd Stage: Increasing world growthafter 1945 19th C industrializationaccompanied by weakgrowth rates even for the mostadvanced countries a. newest technologies extremelydynamic (e.g. textile, steel, railroads) b. continued importance of agricultural sectorinto the 20th c. c. lowdomesticconsumption 2nd Stage: Increasing world growthafter 1945
  • After 1945, world growth rate increases
  • Stimulated by the gradualliberalization of trade
  • From 1970’s by acceleration of globalization
  • Between 1945 and 1975, growthoriginatesmostly in the industrialized nations (western Europe and Japan)
  • 2nd Stage: Increasing world growthafter 1945
  • Early 21st C. highesteconomicgrowth rates in emerging countries BRIC nations (Brazil, Russia, India, China) + South Africasince 2011
  • Known for rapidgrowthof theirindustrialsectors
  • Capitalizing on theiradvantages (e.g. naturalresources, labour, infrastructure)
  • Strongstate intervention
  • BRIC nations 3rd Stage: Capitalism in Crisis 3rd Stage: Capitalism in Crisis Series of financial/economic crises highlight the limits of capitalism and the interdependence of the world
  • Stock market crash 1929, end of period of stronggrowth of US economy, warning to speculators
  • Collapse of 1st economy in the world causes contraction of international trade and massive increase in unemploymentaround the world
  • 3rd Stage: Capitalism in Crisis 3rd Stage: Capitalism in Crisis 3rd Stage: Capitalism in Crisis
  • Periods of Crisisenablecapitalism to adapt and for new powers to emerge.
  • Slowing down of growth in Europe
  • Birth of multinational corporations
  • Progression of international trade
  • Appearance of new competition in Europe (Germany) and outside of Europe (U.S. / Japan)
  • 3rd Stage: Capitalism in Crisis
  • Financial crisis in 2008 leads to growing intervention of international regulatoryorganizations
  • IMF
  • G20
  • The Global Power Shift Key Words
  • capitalism: economicsystem which relies on the privateownership of the means of production (e.g. factories, machines). Owning capital producesrevenue. The end goal of the system is the accumulation of profit
  • Growth: constant increase in the production of wealth. Prior to 1750, the rate islow, but demographicgrowth in Europe subsequentlyhelpsto increase the development of industry and services
  • Key Words
  • Innovations: inventions which have industrial applications and whichstimulate the growth of new sectors.
  • Globalization: the processwhereby
  • (1) economiesand societiesbecomeinterconnected;
  • (2) a global stage exists for the free exchange of goods, services and information
  • Globalization: the processwherebyeconomies and societiesbecomeinterconnected and a global stage for the free exchange of goods, services and information
  • Key Terms
  • Emerging Countries: underdeveloped countries which have become more developedthanks to theirsuccessfulintegration in the globalizedeconomy. By attractingforeigninvestors, they have been able to develop.
  • Consumer society: Accordingto the economist Rostow, the last stage of industrialdevelopment, characterized by the democratization of mass-producedindustrialproducts (e.g. cars, appliances, etc.)
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