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TOPIC 1 - SURVEY OF THE GLOBAL ECONOMY - Coggle Diagram
TOPIC 1 - SURVEY OF THE GLOBAL ECONOMY
energy supply/price & other shocks
china
continuing rolling vocid-19 lockdowns
worrying vulnerabilities in property markets/financial system
geo-political tensions centered on Taiwan
general aftershocks in supply-chains/labour markets post-pandemics
Russian invasion of Ukraine
human infrastructural impact
huge reconstruction costs
most sever/comprehensive sanctions on Russia
tightening re oils, eventually gas, exemptions food/medical
EU bans 75% of Russian oil imports to EU. 90% by end of 2022
EU policy to get gas reserves to 80% capacity by November 2022- will be achieved by hiking prices
pipeline gas
Nord stream 2 pipeline from Russia via Baltics to Germany has been cancelled - in response to Putin
Nord Stream 1 existing pipeline, flow reduced to 40%, 20%, now indefinitely shut off
LNG (Liquefied Natural Gas)
usually shipped to europe from US and Asia - recently tankers due in China have been re-routed to EU on higher prices
requires re-gasification before entering the pipeline network
connectivity of pipelines in West Europe is not great- most LNG terminals
more difficulties for Europe's energy
Germany-
big dependence on cheap Russian natural gas
since policy change to phase out nuclear power generation following Fukushima
France usually generates 75% of electricity via nuclear - over half of plants down for maintenance
france generally exports electricity to Europe- currently net importer
norway struggling with hydroelectricity due to lack of rainfall
solar power struggled due to heatwave
monetary policy responses
policies to suppress demand - ultimately rationing options - prioritising households, emergency services etc
prices
G7 propose to cap russian oil prices directly
EU proposing to reform how electricity prices are set
renewable generation now much cheaper - gives them a higher market price - incentive to invest
price caps potentially
economists point to the virtue of allowing price signals ( a change in the price of goods or services which indicates that the supply or demand should be adjusted) to work - signals to reduce use
headline inflation
- inflation related to all the economy's commodities, goods, and services
core inflation
- inflation-related to all the commodities, goods, and services in the economy minus the volatile food prices and fuel prices
consequences of globalisation
globalisation = market integration on a world scale -> market integration means that
domestic markets are increasingly dependent on international markets
prices will reflect global demand rather than local demand
3 historical phases of globalisation:
Late 19thC to WWI
a highly globalised economy
Inter-war years:
globalisation in retreat
After WWII to the present: gradual return to globalised world especially intense from around 1990 'hyper-globalisation'
Globalisation under pressure
2008 financial crisis -> some people directly attributed gloablisation to the crash
the costs of the crisis sparked a lot of backlash
early stages of the pandemic -> retreat from globalisation
current energy and food concerns add to the pressure on open trade markets
globalisation
= a term used to describe how trade and technology have made the world into a more connected and interdependent place