INTRODUCTION INTO THE WORLD ECONOMY LESSON I Ingrid Majerova World Economy EVS/XXX First…. •Name: Ingrid Majerova • •Office: A 203 • •E-mail: majerova@opf.slu.cz • •Consultation hours: ……. • •Info: Moodle IS SU Outline of the lecture • 1.World Economy as a Science 2. 2. Definition of the World Economy 3. 3. Classification of Countries 4. 4.GDP and GDP per capita in the World 5. 5.Development of the World Economy 6. 6. 6. DEFINITION OF THE WORLD ECONOMY •In domestic and foreign literature there are various approaches to definition of the concept “world economy”. The most important of them are: •Set of the national farms connected with each other by system of the international division of labor. Such definition is based on idea of the world economy as to the sum of national economies; •World system of the production and financial relations. The main components of the world economy – the sphere of real production and the sphere of the address found reflection in such approach; •Set of the national and state and non-state structures, and also their interactions on the basis of the international division of labor and political contacts. In this treatment the world economy represents a common economic space (mega-economy) in which act as subjects of the economic relations: national economies of the countries of the world; subjects of world business – multinational corporations and their alliances; institutes of the world economy – the international economic organizations. • DEFINITION OF THE WORLD ECONOMY •World economy - a single social organism in which national economies are in different degrees integrated through an international division of labor and international economic relations. •Cornerstones of the WE - individual, of various sizes and various advanced national economies. •Transnational corporations play a significant role. DEFINITION OF THE WORLD ECONOMY •Elements of the WE: •national economies •regional economic groupings •transnational companies •and international economic institutions • •International economic relations: •international trade •international capital movements •international monetary relations •international labor migration •and the international flow of scientific and technical information CLASSIFICATION OF COUNTRIES •Individual countries: the basic elements of the world economy: • •basic division: advanced countries x developing countries • •to 90´s: plus group of countries with centrally planned economies • •division of the former centrally planned economies: countries with economies in transition x countries with central control of foreign trade CLASSIFICATION OF COUNTRIES •Narrower concept (UN): the criterion of political independence and the nature of economic relations. •Wider concept (WB, OECD): terms of economic level measured by GDP or GNP per capita, the character of the sectoral structure of the economy and the status and level of infrastructure. •New classification of UNCTAD: •advanced economies •former European countries with centrally planned economies and the Commonwealth of Independent States (ECONOMIES IN TRANSITION) •and developing economies. NAME OF LECTURE CLASSIFICATION OF COUNTRIES •Subgroups of developing countries in UNCTAD division: •Major oil exporters •Landlocked Developing Countries (LLDC´s) - developing countries not having access to the sea (ocean) •Small Island Developing Countries (SIDC´s) •Least Developed Countries (LDC´s) - world's poorest countries •Heavily indebted poor countries (36 post-completition point + 3 pre-decision point countries) NAME OF LECTURE NAME OF LECTURE NAME OF LECTURE CLASSIFICATION OF COUNTRIES •According to OECD: •OECD countries •and non-OECD countries that are further divided into: •Africa and the Middle East •developing countries of Asia •Latin America •the countries of Central and Eastern Europe •emerging markets - countries that are the targets of investment flows and represent promising markets for products from advanced countries, on the other hand, are able to establish production cooperation with them. CLASSIFICATION OF COUNTRIES •World Bank clasifies countries by the GNI per capita and ranks them into the performance groups (in 2019): •countries producing more than 12,376 USD per capita (high income) •countries with an output from 3,996 to 12,375 USD (upper middle income) •countries with an output from 1,026 to 4,995 USD (lower middle income) •countries with less than 1,025 USD/capita (low income) CLASSIFICATION OF COUNTRIES CLASSIFICATION OF COUNTRIES CLASSIFICATION OF COUNTRIES •Division by innovations: •Center of the world economy: GDP over 10.000 USD per capita, this group is a source of innovation and scientific and technical progress •Close peripherals: GDP from 3000 to $ 10,000 per capita, and the ability to apply and accept innovations produced elsewhere •Distant peripherals: rest of the world with low levels of participation in the international division of labor with low skills even if only to accept innovations CLASSIFICATION OF COUNTRIES CLASSIFICATION OF COUNTRIES •Division of countries according to the size of the economy: •Small economies: to 20 million inhabitants •Medium-sized economies: from 20 to 100 million inhabitants •Large economies: over 100 million inhabitants CLASSIFICATION OF COUNTRIES GROWTH OF THE WORLD ECONOMY Growth of World Trade and World GDP (Source: UN/DESA) GROWTH OF THE WORLD ECONOMY Contribution to Global Merchandise EXPORT Volume Growth by Region in 2011-2018 (Source: UN/DESA) Contribution to Global Merchandise IMPORT Volum Growth by Region in 2011-2018 (Source: UN/DESA) GROWTH OF THE WORLD ECONOMY GROWTH OF THE WORLD ECONOMY GROWTH OF THE WORLD ECONOMY GROWTH OF THE WORLD ECONOMY WORLD ECONOMY Thank you for your Attention!