Lesson 5 and 6 TCW

• Economic globalization


  The increasing integration of economies around the world, particularly through the movement of goods, services and capital across borders
• Economic globalization is a historical process, the result of human innovation and technological process
• Frank and Gills (1993) located the origin of globalization in the distant past, stating "the existence of the same world system in which we live stretches back at least 5,000 years"
• Convergence


  The phenomenon of the futures price and the cash price of the underlying commodity moving closer together over time
• Divergence


  The opposite of convergence, when the value of an asset, indicator, or index moves, the related asset, indicator, or index moves in the other direction
• International Monetary System


  The operating system of the financial environment, which consists of financial institutions, multinational corporations, and investors. It provides the institutional framework for determining the rules and procedures for international payments, determination of exchange rates, and movement of capital
• Gold standard


  A monetary system where a country's currency is backed by gold reserves. Gold could be bought or sold in unlimited quantities at a fixed price in convertible paper money per unit weight of the metal
• The Bretton Woods System


  1. After WWII, 44 countries sent delegates to the first meeting conference in Bretton Woods, New Hampshire to discuss a new financial system that will handle crises

  2. The US dollar was the highest currency at that time, that is why it countries valued their currency to dollar, while dollar was connected to the value of gold

  3. The Bretton Woods System collapsed in 1971 when President Nixon announced the US would end on demand convertibility of the dollar into gold
• European Monetary Integration


  The European Monetary System (EMS) was introduced in 1979 with the aim of coordinating the exchange rate policies and establishing the European Monetary Union
• Cobden-Chevalier Treaty


  A free trade agreement between Britain and France in 1860 that lowered or eliminated duties levied on goods traded between the two countries
• GATT (General Agreement on Tariffs and Trade)


  A legal agreement between many countries, whose overall purpose was to promote international trade by reducing or eliminating trade barriers such as tariffs or quotas
• Global South


  Used to describe countries in Asia (excluding Korea, China, Japan, Singapore etc), Central America, South America, Mexico, Africa and some parts of the Middle East
• The Global South used to be called the "Third World", identifying countries with one side of the underlying global North–South divide, the other side being the countries of the Global North
• The Starbucks represents the global North


  The shanty represents the global South
• Poverty is a long-time problem yet to be solved, it is not modern nor it is global
• The state of countries in the Global South can't be merely diminished in a short span of time with plain speculations, but instead requires a long-term plan
• Poverty can grow so fast and unstoppable without a responsible leader backing up a plan to diminish or eradicate poverty
• The global South originated as the product of Western imagination, stemming from the Spanish conquest of Latin America in the 16th century and later French and American colonial expansion
• In 1944, during the creation of the UN, the Western powers officially abandoned the racial ideology that underpinned the colonial order
• Modernization theory


  A theory used to explain the process of modernization one nation goes through as it converts from a traditional society to a modern one
• The Bandung Conference in 1955 consisted of 29 Asian and African countries to establish economic and cultural cooperation amidst the threat of developing forms of colonialism
• Social democrats like Vladimir Lenin argued for communists to construct an alliance with national elites and radical peasants to fight against colonialism
• Ho Chi Minh led a long and ultimately successful campaign to make Vietnam independent, and was one of the most influential communist leaders of the 20th century