Title: Lecture Notes International Economics for E&BE
Lecture Notes International Economics for E&BE

Lecture Notes International Economics for E&BE

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Lecture Notes International Economics for E&BE

Lecture Notes International Economics for E&BE

Deze aantekeningen zijn gebaseerd op het vak International Economics van het jaar 2015-2016.

Lecture 1

The lecturer started with mentioning the difference between International Economics and International Business:

  • Objective International Economics: to explain how international economic interactions influence the allocation of scarce resources, both within and between nations. This objective takes a macro prospective of the economy.

  • Objective International Business: analyze managerial decisions taken on the basis of a cost-benefit analysis in the global economic environment. This objective takes a micro prospective of the economy.

The remaining part of the lecture was about chapters 1.4-1.8 and 3.1-3.3. The first part of the lecture a few facts about the world economy were mentioned, then in the second part the topics of globalization and economic efficiency were addressed and the last part was about competitive advantages.

A few facts about the world economy

From the second wave of economic prosperity which began in 1950, real GDP per capita doubled, which means that we are twice as rich as two generations ago, world production quadrupled, the world trade multiplied 18-fold, and world FDI multiplied 25-fold. At the same time globalization took place. We distinguish five types of globalization:

  • Cultural globalization

  • Economic globalization

  • Geographical globalization

  • Institutional globalization

  • Political globalization

The most important type of globalization is the economic globalization. The economy globalized due to the rapid increase in cross-border flows of goods, services, capital, and technology. Two factors used as an indication of the level of globalization are the level of trade liberalization and technological developments. Trade liberalization is often voluntary, but also many countries are forced. For example, Greece liberalizes it's economy in order to get loans from the ECB.

Globalization does not only entail positive effects, the negative outcomes of globalization are called disruptive effects. Because of the negative effects of globalization also anti-globalization activists exist. Examples of important disruptive effects are the MNEs that are so large that they can adapt policies to their own preferences, the widening income gap between the rich and the poor, low wages and bad working conditions in developing countries and the destruction of local markets by greater firms. The book mainly discusses the opportunities globalization is bringing, more

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