Erasmus Najaarsdag 2005

Transcription

1 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 1 Erasmus Najaarsdag 2005 International Bachelor Economics & Business Economics IBEB In-depth programme Lecture Globalisation Lecture Hall C3, Saturday 5 Nov and Introduction and overview About me Current perspective Historical perspective Globalization Conclusion

2 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 2 Introduction and overview This week s The Economist Tired of globalisation But in need of much more of it

3 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 3 Erasmus Najaarsdag 2005 International Bachelor Economics & Business Economics IBEB In-depth programme Lecture Globalisation Lecture Hall C3, Saturday 5 Nov and Introduction and overview About me Current perspective Historical perspective Globalization Conclusion

4 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 4 Charles van Marrewijk Born in Schipluiden (Den Hoorn) The Netherlands, 1959 Studied (and finished): MAVO HAVO RMTuS (Horticulture) (worked as a grower for a while in Het Westland: Gerbera s) VWO Erasmus University (BA and MA, Economics) Purdue University (MSc and PhD, Economics) Work: University of Groningen Erasmus University Longer term visits: Cornell, Yale, Cambridge, Adelaide, Princeton, Benguet

5 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 5 Some of my books: The Economics of International Transfers Cambridge University Press, 1998 (with Steven Brakman) An Introduction to Geographical Economics Cambridge University Press, 2001 (with Steven Brakman and Harry Garretsen) Translated into Chinese by Southwest University of Finance and Economics Press

6 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 6 Some of my books: International Trade & the World Economy Oxford University Press, 2002 Translated into Chinese by Shanghai University of Finance and Economics Press, to appear 2006 Nations and Firms in the Global Economy: An Introduction to International Economics and Business Cambridge University Press, 2006 (with Steven Brakman, Harry Garretsen, and Arjen van Witteloostuijn)

7 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 7 Erasmus Najaarsdag 2005 International Bachelor Economics & Business Economics IBEB In-depth programme Lecture Globalisation Lecture Hall C3, Saturday 5 Nov and Introduction and overview About me Current perspective Historical perspective Globalization Conclusion

8 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 8 We have become accustumed to steady growth rates (Note on a log scale constant growth is a straight line) USA; per capita GDP (1990 G-K $), log scale per capita GDP year

9 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 9 16 Rapid growth in China Economic developments in China Export of goods and services (% of GDP, right scale) GDP/cap (% of world average, left scale) 7 0 GLF CR Mao ER SP&TS

10 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 10 This week s ESB (Economisch Statistische Berichten) I make some remarks about recent developments and China s economic growth rates

11 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 11 Tired of globalisation?

12 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 12 Tired of globalisation! poor working conditions in LDCs Workers in developing countries should get fair wages otherwise we should not trade with them!

13 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 13 Tired of globalisation! poor countries grow slowly a. Initial income level and economic growth ( ) annual growth rate (%) 8 4 other countries trendline 0-5,000 40,000-4 Sub-Sahara African countries -8 per capita GDP in 1980 (constant 1995 US dollar)

14 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 14 Erasmus Najaarsdag 2005 International Bachelor Economics & Business Economics IBEB In-depth programme Lecture Globalisation Lecture Hall C3, Saturday 5 Nov and Introduction and overview About me Current perspective Historical perspective Globalization Conclusion

15 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 15 World population in historic perspective (millions) 6000 How many people How many in are alive today? 5000 the year 0? the year 1000? 4000 the year 1500? years war, Ming collapse Mongol invasions Black death data: Kremer (1993) + Maddison (2001) year

16 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 16 World population, UN projection (2001): population (millions) high estimate low estimate realisation projection year

17 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 17 World GDP per capita; Maddison (2001), The World Economy: A Millennial Perspective, OECD (1990 international $) $6000 NB: you need $ 400 to stay alive $5709 $5000 $4000 $3000 What was it in the year 0? How about the year 1000? What is average world GDP per capita now? $2000 $1000 $ year 2000

18 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 18 Erasmus Najaarsdag 2005 International Bachelor Economics & Business Economics IBEB In-depth programme Lecture Globalisation Lecture Hall C3, Saturday 5 Nov and Introduction and overview About me Current perspective Historical perspective Globalization Conclusion

19 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 19 Globalization what is it? Cultural globalization; we are increasingly exposed to the same culture? Harry Potter, McDonalds, Toyota. Economic globalization; we experience increased interdependence of national economies and greater integration of labour, goods, and capital markets. Geographical globalization; feelings of compressed time and space resulting from more rapid transport and (electronic) exchange of information, allowing disentanglement of production processes. Institutional globalization; spread of neo-liberal institutions and regulations promoted by IMF/Worldbank/WTO (free trade, free movement of capital). Competition forces multinationals to adopt similar policies. American regulations imposed on others. Political globalization; power of multinationals versus the nationstate. Race-to-the-bottom in tax rate or environmental policies.

20 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 20 Trade Merchandise exports, % of GDP in 1990 prices data: Maddison (2001) world USA Japan

21 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 21 Trade Has been going on for some time ; O Rourke, Williamson (2001) Handel = trade; BBP = GDP Maddison (2001) annual 4 growth 3,5 rates 3 2,5 2 1,5 handel BBP 1 0,5 0-0,

22 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 22 Capital flows Source: based on Obstfeld and Taylor (2003). 0.6 Foreign capital stocks; assets / world GDP

23 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 23 Maddison (2001) countries and regions Austria Belgium Denmark Finland France Germany Italy Netherlands Norway Sweden Switzerland United Kingdom 12 Countries Total Portugal Spain Other Total Western Europe Eastern Europe Former USSR United States Other Western Offshoots Total Western Offshoots Mexico Other Latin America Total Latin America Japan China India Other Asia Total Asia (excl. Japan) Africa World

24 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 24 Leaders and laggards 500 Leaders and laggards in GDP/capita; index relative to world average leader 1500? next leader? next leader? laggard 1500? other laggard? next leader? Italy Netherlands Africa United Kingdom Western Offshoots laggard 1960s? year United States data: Maddison (2001) China 2000

25 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 25 Open economies grow faster average ec. growth, percent/year Growth rates in open and closed economies, Developed countries Developing countries Open Closed Data source: Sachs and Warner (1995, p. 36)

26 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 26 Erasmus Najaarsdag 2005 International Bachelor Economics & Business Economics IBEB In-depth programme Lecture Globalisation Lecture Hall C3, Saturday 5 Nov and Introduction and overview About me Current perspective Historical perspective Globalization Conclusion

27 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 27 Remember this? a. Initial income level and economic growth ( ) annual growth rate (%) 8 4 other countries trendline 0-5,000 40,000-4 Sub-Sahara African countries -8 per capita GDP in 1980 (constant 1995 US dollar)

28 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 28 How about correcting for size? b. Initial income, population, and ec. growth ( ) annual growth rate (%) 8 4 China India USA size of bubble is proportional to population size in 1980 Japan 0-5,000 40,000-4 Sub-Sahara African countries -8 per capita GDP in 1980 (constant 1995 US dollar)

29 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; Remember this? (China) Economic developments in China Export of goods and services (% of GDP, right scale) China is able to grow fast because (and since) it opened up to the outside world GDP/cap (% of world average, left scale) 7 0 GLF CR Mao ER SP&TS

30 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 30 So do you really want to help the developing countries?

31 Erasmus University Rotterdam, Dep. of Economics; Charles van Marrewijk, 2005; 31 This week s The Economist Tired of globalisation But in need of much more of it Thank you for your attention!