Econ

• GDP


  Doesn't take into account earnings such as remittances, interest, dividends i.e. earnings by its residents while outside of the country
• Real GDP


  Inflation adjusted
• Nominal GDP


  Not adjusted to inflation
• GDP per capita


  GDP divided by total population
• GDP adjusted for PPP (purchasing power parity)

  Compares prices of a good / service between countries to compare currency values against each other (adjusted GDP figure to recognise differences in cost of living between countries)
• Limitations of GDP


  • Doesn't take into account remittances
  • Doesn't take into account shadow economy
  • Doesn't take into account income inequality (could hide lots of poverty)
  • Living standards aren't just driven by GDP, e.g. pollution affects GDP
  • Doesn't consider the improving quality of (in particular) technological goods
• GDP doesn't include unofficial or unpaid work. The value of goods and services that are consumed by the producers rather than traded, is also not included. This is a particular issue in developing countries with higher levels of subsistence agriculture
• Increases in Real GDP may not be shared equally among an economy's population : GDP per capita shows average income per person
• Easterlin paradox relates to the idea that happiness does initially rise with average incomes, but only up to a point. Beyond this, the marginal gains in happiness fall, perhaps because people care about relative as well as absolute incomes ( why does he have unreleased Ferrari and I have a 3 year old one etc…)
• Globalisation


  A country's economy grows and becomes more globally connected (and interdependent) on other countries through trade etc
• Peter Jay, UK economist: 'the ability to produce any goods (or services) anywhere in the world, using raw materials, components, capital and technology from anywhere, sell the resulting output anywhere, and place the profits anywhere'
• Globalisation


  A process in which national economies have become increasingly integrated and interdependent
• World's biggest exporters


  • China (cheap labour)
  • US
  • Germany
  • Netherlands (Rotterdam, one of the biggest ports in the world)
  • Japan
  • South Korea
• Hub economy


  A country/city that serves as a central point for global business/ finance/ transport.. E.g. Changi Airport and one of biggest seaports located in Singapore
• Singapore has a trade to GDP ratio above 300% (trade is hugely important to their economy)
• Causes of globalisation in last 50 years


  • Increased technological change
  • Economic openness
  • Specialisation
  • Lower taxes
  • Availability of raw materials
  • Improvements in infrastructure
  • Improvements in communications technology and IT
  • Trade liberalisation
  • Increasing number and influence of TNCs (TransNational Companies e.g. Amazon)
  • Increased (labour) migration between countries (Mobility of labour)
  • Trade Blocs
  • Containerisation
• Containerisation


  A system of freight transport for use in sea shipping that has reduced the transportation costs of moving thousands of different goods across the globe
• Over 200 countries have ports open to container ships
• Containerisation


  • Containers have standardised dimensions
  • Containerisation has been a catalyst for globalisation
• How containerisation benefits manufacturers

  Economies of scale, goods can be transported in bulk ( lower cost per unit, which can be used to lower prices and become more price competitive, or make more profit per unit)
• Containerisation has lowered the costs of trade, encouraging specialisation and the expansion of global supply chains
• Singapore, with a population of just 5.4 million, moved 34 million TEU in 2017 (20 foot container) - more than Italy, France, Russia, Sweden and UK combined