Globalization
THE
An Economic Education Newsletter from the Federal Reserve Bank of St. Louis
Crossing Borders:
The Globalization Debate
Lesson PLan
Inside the Vault—spring 2008
Crossing Borders: The Globalization Debate
As published in Inside the Vault, Volume 13, Issue 1, Spring 08 lobalization can be defined as a phenomenon of increased economic integration among nations, characterized by the movement of people, ideas, social customs and products across borders. This phenomenon has a long history, dating back to the trade routes developed during the Roman Empire, as well as those pioneered by Marco Polo or ocean voyagers like Columbus and Magellan. Globalization has been crucial for economic growth over time. In his influential study “The World Economy: A Millennial Perspective,” the noted economic historian Angus Maddison argued that economic advancement across time was sustained by three interactive processes: t • he conquest or settlement of relatively empty areas that had fertile land, new biological resources or a potential to accommodate transfers of population, crops and livestock; • international trade and capital movements; and • technological and institutional innovations. As Maddison and others have noted, technological innovations have played a key role in spurring previous globalization episodes. Transfers of technology from Asia and Egypt—such as silk, spices, textiles, glass blowing and rice—helped Venice and its colonies play a key role in the development of Europe. As economic integration spread across continents, political and financial institutions evolved to enhance and regulate the global marketplace. The current globalization period, which more or less began in the late 1960s, contains many of the same aspects of earlier episodes. Reduced transportation costs, the opening of new
International Trade Exposure: United States and the Rest of the World
World except U.S.
% of GDP
G
U.S.
80 70 60 50 40 30 20 10 1975 1980 1985
An Economic Education Newsletter from the Federal Reserve Bank of St. Louis
Crossing Borders:
The Globalization Debate
Lesson PLan
Inside the Vault—spring 2008
Crossing Borders: The Globalization Debate
As published in Inside the Vault, Volume 13, Issue 1, Spring 08 lobalization can be defined as a phenomenon of increased economic integration among nations, characterized by the movement of people, ideas, social customs and products across borders. This phenomenon has a long history, dating back to the trade routes developed during the Roman Empire, as well as those pioneered by Marco Polo or ocean voyagers like Columbus and Magellan. Globalization has been crucial for economic growth over time. In his influential study “The World Economy: A Millennial Perspective,” the noted economic historian Angus Maddison argued that economic advancement across time was sustained by three interactive processes: t • he conquest or settlement of relatively empty areas that had fertile land, new biological resources or a potential to accommodate transfers of population, crops and livestock; • international trade and capital movements; and • technological and institutional innovations. As Maddison and others have noted, technological innovations have played a key role in spurring previous globalization episodes. Transfers of technology from Asia and Egypt—such as silk, spices, textiles, glass blowing and rice—helped Venice and its colonies play a key role in the development of Europe. As economic integration spread across continents, political and financial institutions evolved to enhance and regulate the global marketplace. The current globalization period, which more or less began in the late 1960s, contains many of the same aspects of earlier episodes. Reduced transportation costs, the opening of new
International Trade Exposure: United States and the Rest of the World
World except U.S.
% of GDP
G
U.S.
80 70 60 50 40 30 20 10 1975 1980 1985