'Describe the main features of the global economy and examine the nature and extent of interdependence between economies'
The global economy consists of all the countries in the world that produce goods and services and who therefore contribute to world Gross Domestic Product (GDP).
Globalisation is the increasing economic integration between countries leading to the emergence of a global economy. There are 4 main features of this new Global Economy:
3.New Rules and Norms
4.New Tools of Communication
With the new Global Economy new markets are being created. Already established global markets in services such as banking, insurance and transport are growing rapidly. New financial markets which are deregulated, globally linked, working around the clock and being operated from a distance in real time have emerged. There are also new global consumer markets with global brands.
New actors have emerged with world bodies able to enforce rules on national government such as the World Trade Organisation (WTO).
Multinational corporations now exist integrating their production and marketing. An international criminal court system is in the making. Regional countries have started coming together and forming deregulated trading groups such as the European Union (EU) and the ASEAN Free Trade Agreement (AFTA).
New rules and norms are spreading throughout the world. Many countries are moving towards democracy as their political preference. Market economic policies are spreading around the world, with greater privitisation and liberalization than ever before. Multilateral agreements in trade and taking on new agendas such as environmental and social responsibility are becoming a worldwide trend.
For new markets, actors and rules to come about there have to be new tools of communications. These new communicating tools are able to link people across the world who can communicate in real time.