Global cities are clearly connected to globalization, which, as you read in the text, is defined as9/8/2023 Above all, ideas have increasingly become the common property of the whole of humanity. The technology that is used to produce these goods is increasingly standardized and invariant to the location of production. An increasing share of consumption consists of goods that are available from the same companies almost anywhere in the world. While they cannot be measured with the same ease, some other features of globalization are perhaps even more interesting. It has resulted also in national capital markets becoming increasingly integrated, to the point where some $1.3 trillion per day crosses the foreign exchange markets of the world, of which less than 2% is directly attributable to trade transactions. It is reflected in the explosion of foreign direct investment (FDI): FDI in developing countries has increased from $2.2 billion in 1970 to $154 billion in 1997. Globalization is manifested in the growth of world trade as a proportion of output (the ratio of world imports to gross world product, GWP, has grown from some 7% in 1938 to about 10% in 1970 to over 18% in 1996). We mean that the whole of the world is increasingly behaving as though it were a part of a single market, with interdependent production, consuming similar goods, and responding to the same impulses. It is the world economy which we think of as being globalized. I will conclude by considering what policy reactions seem to be called for. The bulk of my paper is devoted to discussing what we know, and what we do not know, about its consequences. I shall then go on to consider what has caused it. Let me nonetheless outline briefly what I understand by the term. Globalization has become a familiar enough word, the meaning of which has been discussed by others before me during this conference.
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