AMSCO 9.4 Economics in the Global Age Notes

📍Topic 9.4 Economics in the Global Age

📖 AMSCO p.657 - p.663

Main Idea

Key Timeline

Image Courtesy of Isaiah Penny

Things to Know

Rise of Free-Market Economies

• The 1980s and 1990s saw a global shift towards neoliberal and economic liberalization, particularly under leaders like Reagan and Thatcher.
• This era was characterized by a movement towards deregulation, privatization, and reduced government intervention.
• This shift led to significant economic growth, as well as increased income disparities, which sparked debates on the social impacts of neoliberalism. 📈

Regional Economic Shifts

• Chile under Pinochet was an early adopter of neoliberal reforms, experiencing growth but also increased social inequality. 💸
• China, under Deng Xiaoping, dramatically transitioned from a communist to a market-oriented economy, becoming a leading global industrial and technological player. 🏭
  • A significant event during this period was the Tiananmen Square Protests of 1989. These protests were a direct result of the public’s demand for political reform alongside economic liberalization.
  • The government’s harsh crackdown on these protests highlighted the complexities and challenges of China’s path toward modernization and global economic integration.
• India embraced economic liberalization in the 1990s, boosting its IT(Information Technology) and services sectors through reduced trade barriers and foreign investment. 🚀

Emergence of Knowledge Economies and Tech Innovation

• Knowledge-based economies, as seen in Silicon Valley, Bangalore, and Finland, drove economic growth.
• Finland, in particular, invested heavily in education, R&D(Research and Development), and technology, becoming a leader in telecommunications and IT. 🌐
• Japan's post-WWII focus on high-tech and manufacturing industries led to rapid economic growth, establishing it as a major global economic power. 🛠️

Changing Global Manufacturing and Trade

• The rise of manufacturing hubs in Southeast Asia (like Vietnam and Bangladesh) and Latin America (including Mexico and Honduras) reflected shifts in global production patterns due to globalization, lower labor costs, and more relaxed regulations.🌍
• Trade agreements like NAFTA (North American Free Trade Agreement) and ASEAN (Association of Southeast Asian Nations) facilitated regional economic cooperation and integration. 🤝
• Maquiladoras in Mexico are factories that import materials duty-free for assembly & subsequent export which flourished post-NAFTA, and bolsters Mexico's manufacturing sector. 🏭
• Bangladesh emerged as a significant player in the textile industry, capitalizing on low labor costs and global trade networks. 🧵
• The WTO (World Trade Organization) and the GATT (General Agreement on Tariffs and Trade) played crucial roles in regulating global trade, reducing tariffs, and fostering economic collaboration.

Influence of Multinational Corporations and Globalization

• Multinational corporations like Apple, Samsung, Toyota, and Mahindra & Mahindra reshaped global markets and production, influencing global economic trends. 📊
• Globalization spurred economic growth but also raised concerns about labor standards, environmental conservation, and cultural diversity. 🌐

Terms to Remember