The Centre of Gravity Shifts: Transforming the Geographies

of the Global Economy

Global Shift

Chapter 2

Review

• Concepts to Review– Globalization, economic geography

• Key Words– Geographies of globalization, FDI, BRIC economies,

volatility of economic growth, transnational corporations

Global Division of Labour

• Over 300 years, a global division of labour developed, with a core–periphery configuration

• Manufacturing concentrated in the core, with exports and imports to/from periphery

• Second World War: destruction of extant manufacturing capacity, and development of new technologies

• Post-war division

– Capitalist ‘West’ dominated by the USA

– Communist ‘East’

– ‘Third World’

• Post-Cold-War developments: the re-emergence of Asia as the world’s most dynamic economic region

Global Interconnectedness

• Two important features of the global economy since 1950 – increased volatility of economic growth

– growing interconnectedness

• Current trends– Variation between countries in trade integration terms

– Major indicator of growing interconnectedness: the fact that the growth of trade has outpaced the growth of output

– Most trade is intra-regional, within the three major regions (Europe, North America, Asia), and most exterior trade is between them

FDI and TNCs• FDI

– definition– importance of FDI to a country’s economy as

a measure of integration

• TNCs– definition– significance of intra-firm trade

• Changing patterns of trade and investment

Regional Comparisons

• USA

• Europe

• Eastern Europe

• Asia

• Latin America

• World becoming increasingly multi-polar