A. 2 periods of globalization
- 1st period: from the industrial revolutions to World War I
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2nd period: from the beginning of the 1950s. It is divided into two phases:
—pre-oil shock phase: internationalization
—post-oil shock phase: globalization
B. 2 main causes of globalization
- Technical progress allowing a decrease in transport costs
- The success of free-trade ideas, since the 1840s with the abolition of taxes on wheat, with GATT and WTO
C. The elements of globalization
- Intermediation: the bank is the intermediary between the individual and his activities;
- Internationalization of finance: investments in banks or insurance companies;
- Risk management;
- Foreign direct investment (FDI): capital flows for international firms in the form of FDI
Rodrick’s trilemma:
According to Rodrick, it is difficult to have hyper-globalization, the nation-state, and democracy at the same time. Depending on the period, one chooses two of the three elements. Today, we find tensions that come from the fact that individuals reject hyper-globalization; in order to combine the nation-state and democracy, we need a withdrawal from globalization.
Summary of the Economics Course on Globalization:
- I. Globalization: presentation and phases
- II. Waves of globalization
- III. The geography of globalization exchanges
- IV. Multinational firms
- V. Protectionism
