Essay by borisVsevolodUniversity, Bachelor's April 2014

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General Characteristics of the World Economy.


A complex economic system within limited boundaries of a state based on social division of labour, a network of social and economic activities and interdependences at micro, macro and meso levels.

A national economy (country) can not be viable; can not exist alone, but just in correlation with other countries. Any country, no matter how developed it is, can not be isolated from the rest of the world by solving alone the problems they face and refusing to take into account the international context.

The concept of "global economy" or "world economy"

Describes all the national economies in the world analyzed in terms of complex interdependencies and economic links between them (foreign trade relations, cooperation in production, service rendering, currency and financial relations, science and technology etc).

The world economy evolved through several stages:

Geographical discoveries

Development of exchange economy, expansion of economic relations among different countries and regions on the base of which, in XVIth century the "world market" was created.

Development of manufacturing and large-scale industry which has led to extensive changes in the material and technical basis and structure of goods and services production.

Technical and scientific revolutions of the XVIIth, XVIIIth, XIXth centuries, which have helped strengthen the national economies markets.

Most theorists argue that the world economy emerged in the late nineteenth and in the early of twentieth century as a result of the formation of independent states and broadening by the first industrial revolution

Development of international division of labor and specializations.

The end of World War I, the collapse of the gold standard system and the economic crisis of 1929-1933.

The World War II. Appearance of International Organizations and Institutions.

Appearance of new national economies (countries) on world arena by the end of XX century.