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    International Economic Integration

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    gian reyes

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    International Economic Integration

    Uploaded by

    gian reyes
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    11 views2 pages

    International Economic Integration

    Uploaded by

    gian reyes

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    International Economic Integration

    The globe has changed dramatically since the end of World War II. The two energy crises
    dominated the decade of the 1970s. Stagflation—a mix of high inflation and unemployment—
    became a new "enemy" for industrial countries. Developing nations were growing increasingly
    reliant on foreign borrowing, while centrally planned economies struggled to maintain
    economic development. Furthermore, the globe has changed dramatically during the last two
    decades. The transition from communism to a market economy, which began in Mikhail
    Gorbachev's Russia in the mid-1980s, moved to Eastern Europe in the early 1990s, and then to
    China later that decade, was the largest economic experiment of the twentieth century. Despite
    the fact that the transition to a free market has had mixed results, most Eastern European
    nations have focused on integrating their economies with Europe and joining the EU.
    All of these events contributed to the globe becoming increasingly global in nature, with
    globalization being defined as increased trade and money movements that lead to greater
    economic interdependence among states. It also relates to cross-border labor migration and
    technological transfer, as well as cultural and political concerns that are outside the focus of
    this chapter.
    Globalization is the outcome of technical advances in information technology,
    telecommunications, energy, transportation, and biotechnology, as well as a shift in economic
    policy. A variety of international institutions, such as the World Trade Organization (WTO), the
    International Monetary Fund (IMF), and the World Bank, were introduced in this chapter, along
    with their roles in globalization and economic integration difficulties. Economic integration,
    sometimes known as "regional integration," arose as a result of all of these changes. It refers to
    the selective decrease or elimination of trade barriers among participating states. This also
    entails that parties develop some type of collaboration and coordination, which will vary
    depending on the degree of economic integration, which might range from free-trade zones to
    an economic and monetary union.
    In order to aid growth and achieve significant structural reforms, developing nations join
    regional agreements. Such a regional agreement would establish a market big enough to
    support large-scale manufacturing and, over time, economies of scale would reduce production
    costs, allowing international competitiveness without protection. In principle, the concept
    seemed enticing, but in fact, the development of such regional groupings lacked binding
    commitments to free trade. Furthermore, advantages were distributed unequally, and
    economies of scale resulted in the concentration of industry in a few industrial hubs. As a
    result, during the 1960s and 1970s, most initiatives resulted in tiny groupings with few bilateral
    agreements.
    Following economic changes toward trade and financial liberalization, the wave of globalization,
    and the demise of communism, the adoption of outward-looking policies in the 1980s and
    1990s gave regionalism a new impetus, with many existing arrangements strengthened and
    new ones established.

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