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Development of Economic globalization - Coggle Diagram
Development of Economic globalization
IMF and World Bank are created.
How and when were they created?
The IMF and the World Bank were created in 1944 at the Bretton Woods Conference to solve the same solution and provide loans to countries that were broke after the war to help them get back on their feet.
Where are they know?
Now 78 years later the World Bank and the IMF have grown and are still providing loans to countries in a poor economic states. This would be a positive gain for the suffering nation if the terms for the loan weren't so extreme. This is one of the reasons that we still have third-world countries.
How they "help".
For example, they must lower tariffs and trade barriers to allow more variety in foreign products into their country which intern forces the country into more debt because then its inhabitants buy the foreign products. After all, they're cheaper than buying the local products so the money goes back into the importer's economy.
GATT and the World Trade Organization are created leading to further expansion of the free market.
In 1948 the GATT was established in order to manage and maintain the global economy. It did this for many years until it was replaced into the world trade organisation or WTO in 1995
How the creation of new technology affected economic globalization.
Advancements in technology have helped speed up the process of economic globalization as we can communicate across great distances and travel faster further and with more cargo.
Along with bigger ships and faster planes we now also have the option to invest through our phones and computers in the stock market.
Economic theorists try to influence how we should run the economy.
John Maynard Keynes ideas.
John Maynard Keynes believed that for the economy to thrive and be as successful as possible that there must be government intervention to regulate it.
Who were they?
John Maynard Keynes and Friedrich Hayek were two economic theorists who believed in two completely different forms of economy.
Friedrich Hayek ideas
Friedrich Hayek thought that if the government intervened that it would hinder rather than help the economy thrive and that the freer the free market was then the better off it would be.
Cold War ending leads to expansion of the free market.
Once the U.S had won the cold war their victory served as an excellent boost and helped to spread capitalism and free-market ideology all around the world.
While the U'S turned the majority of soviet Russia into capitalism China opened its borders to capitalism and anyone who still believed in it.
Bretton Woods Conference.
What did the discuss?
It was in this conference that they came up with the concept of the golden standard which meant that a country's wealth needed to be backed by its gold. This isn't the case anymore as they created a better system known as the floating exchange rate and it changed the currencies based on foreign markets so that the currency didn't lose it's value.
When it happened and why.
It was created at the end of WW ll by 44 other nations because they were all worried about their fragile economy created by the devastating effects of the war.
They also made the decision that a countries government gets to decide the value of there currencies.
Definition of Economic Globalization.
Economic globalization can be defined as the integration of the world economies into one another through the trade of goods and products.