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Economic Growth and Globalization since 1850

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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Economic Growth and Globalization since 1850

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  1. EconomicGrowth and Globalizationsince 1850

  2. The Age of Globalization • Exponential change

  3. I. Introduction: A. Global time line

  4. B. Successive Shifts of Power19th-21st Centuries

  5. II. Stages of EconomicGrowth • How did the world progressively enter into a system of production of wealth?

  6. A. 19th CenturyEconomicGrowthsince 1850 • Since 1850, continualacceleration of technicalprogress and strongeconomicgrowth • Sustaineddemographicgrowth • Inequalitiesin development continue

  7. 3 stages of economicgrowth • Entering a world of intensive growth • Increasingworld growthafter1945 • Capitalism in Crisis

  8. 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.

  9. 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

  10. 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)

  11. 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

  12. BRIC nations

  13. 3rd Stage: Capitalism in Crisis

  14. 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

  15. 3rd Stage: Capitalism in Crisis

  16. 3rd Stage: Capitalism in Crisis

  17. 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)

  18. 3rd Stage: Capitalism in Crisis • Financial crisis in 2008 leads to growing intervention of international regulatoryorganizations • IMF • G20

  19. The Global Power Shift

  20. 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

  21. 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

  22. Globalization: the processwherebyeconomies and societiesbecomeinterconnected and a global stage for the free exchange of goods, services and information

  23. 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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