Parts of this article (those related to documentation) need to be updated. Please help update this article to reflect recent events or newly available information.(May 2019)
Economic globalization is one of the three main dimensions of globalization commonly found in academic literature, with the two others being political globalization and cultural globalization, as well as the general term of globalization.[1] Economic globalization refers to the widespread international movement of goods, capital, services, technology and information. It is the increasing economic integration and interdependence of national, regional, and local economies across the world through an intensification of cross-border movement of goods, services, technologies and capital.[2] Economic globalization primarily comprises the globalization of production, finance, markets, technology, organizational regimes, institutions, corporations, and people.[3]
While economic globalization has been expanding since the emergence of trans-national trade, it has grown at an increased rate due to improvements in the efficiency of long-distance transportation, advances in telecommunication, the importance of information rather than physical capital in the modern economy, and by developments in science and technology.[4] The rate of globalization has also increased under the framework of the General Agreement on Tariffs and Trade and the World Trade Organization, in which countries gradually cut down trade barriers and opened up their current accounts and capital accounts.[4] This recent boom has been largely supported by developed economies integrating with developing countries through foreign direct investment, lowering costs of doing business, the reduction of trade barriers, and in many cases cross-border migration.
Beginning as early as 6500 BCE, people in Syria were trading livestock, tools, and other items. In Sumer, an early civilization in Mesopotamia, a token system was one of the first forms of commodity money. Labor markets consist of workers, employers, wages, income, supply and demand. Labor markets have been around as long as commodity markets. The first labor markets provided workers to grow crops and tend livestock for later sale in local markets. Capital markets emerged in industries that require resources beyond those of an individual farmer.[6]
Technology
World War I disrupted economic globalization, with countries adopting protectionist policies and trade barriers, slowing global trade.[7] The 1956 invention of containerized shipping and larger ship sizes reduced costs, facilitating global trade.[8][9]
Globalization resumed in the 1970s as governments highlighted trade benefits. Subsequent technology advancements have accelerated global trade expansion.[10]
The follow-on advances in technology since then have played a pivotal role in the rapid expansion of global trade.[11]
On 27 October 1986, the London Stock Exchange enacted newly deregulated rules that enabled global interconnection of markets, with an expectation of huge increases in market activity. This event came to be known as the Big Bang.
Multinational corporations reorganized production to take advantage of these opportunities. Labor-intensive production migrated to areas with lower labor costs,[17] especially China,[18] later followed by other functions as skill levels increased. Networks raised the level of wealth consumption and geographical mobility. This highly dynamic worldwide system had powerful ramifications.[19] The World Trade Organization Ministerial Conference of 1999 and associated 1999 Seattle WTO protests were a significant step on the road to economic globalization.[20]
The People's Republic of China (2001) and the last remnants of ex-Soviet bloc countries like Ukraine (2008) and Russia (2012) were admitted much later to the WTO process after painful structural reforms.
International non-governmental organizations include charities, non-profit advocacy groups, business associations, and cultural associations. International charitable activities increased after World War II and on the whole NGOs provide more economic aid to developing countries than developed country governments.
Businesses
Since the 1970s, multinational businesses have increasingly relied on outsourcing and subcontracting across vast geographical spaces, due to the global nature of supply chains and the production of intermediate products. Firms also engage in inter-firm alliances and rely on foreign research and development. This is in contrast to past periods where firms kept production internalized or within a localized geography. Innovations in communications and transportation technology, as well as greater economic openness and less government intervention have made a shift away from internalization more feasible.[21] Additionally, businesses going global learn the tools to effectively interact with cultural agility; with people of many diverse cultural backgrounds, expanding their market.[22]
Immigrants
International immigrants transfer significant amounts of money through remittances to lower-income relatives. Communities of immigrants in the destination country often provide new arrivals with information and ideas about how to earn money. In some cases, this has resulted in disproportionately high representation of some ethnic groups in certain industries, especially if economy success encourages more people to move from the source country. Movement of people also spreads technology and aspects of business culture, and moves accumulated financial assets.
Impact
Economic growth and poverty reduction
Economic growth accelerated and poverty declined globally following the acceleration of globalization.
Per capita GDP growth in the post-1980 globalizers accelerated from 1.4 percent a year in the 1960s and 2.9 percent a year in the 1970s to 3.5 percent in the 1980s and 5.0 percent in the 1990s. This acceleration in growth is even more remarkable given that the rich countries saw steady declines in growth from a high of 4.7 percent in the 1960s to 2.2 percent in the 1990s. Also, the non-globalizing developing countries did much worse than the globalizers, with the former's annual growth rates falling from highs of 3.3 percent during the 1970s to only 1.4 percent during the 1990s. This rapid growth among the globalizers is not simply due to the strong performances of China and India in the 1980s and 1990s—18 out of the 24 globalizers experienced increases in growth, many of them quite substantial."[23]
Growth Rate of Real GDP per capita
According to the International Monetary Fund, growth benefits of economic globalization are widely shared. While several globalizers have seen an increase in inequality, most notably China, this increase in inequality is a result of domestic liberalization, restrictions on internal migration, and agricultural policies, rather than a result of international trade.[23]
Poverty has been reduced as evidenced by a 5.4 percent annual growth in income for the poorest fifth of the population of Malaysia. Even in China, where inequality continues to be a problem, the poorest fifth of the population saw a 3.8 percent annual growth in income. In several countries, those living below the dollar-per-day poverty threshold declined. In China, the rate declined from 20 to 15 percent and in Bangladesh the rate dropped from 43 to 36 percent.[citation needed][when?]
Globalizers are narrowing the per capita income gap between the rich and the globalizing nations. China, India, and Bangladesh, some of the newly industrialised nations in the world, have greatly narrowed inequality due to their economic expansion.[23]
The global supply chain consists of complex interconnected networks that allow companies to produce handle and distribute various goods and services to the public worldwide.
Corporations manage their supply chain to take advantage of cheaper costs of production. A supply chain is a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. Supply chain activities involve the transformation of natural resources, raw materials, and components into a finished product that is delivered to the end customer.[24] Supply chains link value chains.[25] Supply and demand can be very fickle, depending on factors such as the weather, consumer demand, and large orders placed by multinational corporations.[26]
Labor conditions and environment
"Race to the bottom"
Globalization is sometimes perceived as a cause of a phenomenon called the "race to the bottom" that implies that to minimize cost and increase delivery speed, businesses tend to locate operations in countries with the least stringent environmental and labor regulations. Pressure to do this is increased if competitors lower costs by the same means. This both directly results poor working conditions, low wages, job insecurity, and pollution, but also encourages governments to under-regulate in order to attract jobs and economic investment.[8] However, if business demand is sufficiently high, the labor pool in low-wage countries becomes exhausted (as has happened in China),[6] resulting in higher wages due to competition, and more demand from the public for government protection against exploitation and pollution. From 2003 to 2013, wages in China and India have gone up by around 10–20% a year.[27]
Health risks
In developing countries with loose labor regulations, there are adverse health consequences from working long hours, and individuals burden themselves from working within vast global supply chains.[28] Women in agriculture, for example, are often asked to work long hours handling chemicals such as pesticides and fertilizers without any protection.[26]
Although both men and women experience shortcomings with health, the final reports stated that women, with the double burden of domestic and paid work experience an increased the risk of psychological distress and suboptimal health. Strazdins concluded that negative work-family spillover especially is associated with health problems among both women and men, and negative family-work spillover is related to a poorer health status among women."[29]
It is common for the work lifestyle to bring forth adverse health conditions or even death due to weak safety measure policies. After the tragic collapse of the Rana Plaza factory in Bangladesh where over 800 deaths occurred the country has since then made efforts in boosting up their safety policies to better accommodate workers.[30]
Mistreatment
In developing countries with loose labor regulations and a large supply of low-skill, low-cost workers, there are risks for mistreatment of some workers, especially women and children.[31] Poor working conditions and sexual harassment are just some of the mistreatment faced by women in the textile supply chain. Marina Prieto-Carrón shows in her research in Central America that women in sweatshops are not even supplied with toilet paper in the bathroom every day. The reason it costs corporations more is because people can not work to their full potential in poor conditions, affecting the global marketplace.[32] Furthermore, when corporations decide to change manufacturing rates or locations in industries that employ more women, they are often left with no job nor assistance. This kind of sudden reduction or elimination in hours is seen in industries such as the textile industry and agriculture industry, both of which employ a higher number of women than men.[26] One solution to mistreatment of women in the supply chain is more involvement from the corporation and trying to regulate the outsourcing of their product.[31]
Global labor and fair trade movements
Several movements, such as the fair trade movement and the anti-sweatshop movement, claim to promote a more socially just global economy. The fair trade movement works towards improving trade, development and production for disadvantaged producers. The fair trade movement has reached 1.6 billion US dollars in annual sales.[10] The movement works to raise consumer awareness of exploitation of developing countries. Fair trade works under the motto of "trade, not aid", to improve the quality of life for farmers and merchants by participating in direct sales, providing better prices and supporting the community.[11] Meanwhile, the anti-sweatshop movement is to protest the unfair treatment caused by some companies.
Various transnational organizations advocate for improved labor standards in developing countries. This including labor unions, who are put at a negotiating disadvantage when an employer can relocate or outsource operations to a different country.[33]
Capital flight occurs when assets or money rapidly flow out of a country because of that country's recent increase in unfavorable financial conditions such as taxes, tariffs, labor costs, government debt or capital controls. This is usually accompanied by a sharp drop in the exchange rate of the affected country or a forced devaluation for countries living under fixed exchange rates. Currency declines improve the terms of trade, but reduce the monetary value of financial and other assets in the country. This leads to decreases in the purchasing power of the country's assets.
A 2008 paper published by Global Financial Integrity estimated capital flight to be leaving developing countries at the rate of "$850 billion to $1 trillion a year."[34] But capital flight also affects developed countries. A 2009 article in The Times reported that hundreds of wealthy financiers and entrepreneurs had recently fled the United Kingdom in response to recent tax increases, relocating to low tax destinations such as Jersey, Guernsey, the Isle of Man and the British Virgin Islands.[35] In May 2012 the scale of Greek capital flight in the wake of the first "undecided" legislative election was estimated at €4 billion a week.[36]
Capital flight can cause liquidity crises in directly affected countries and can cause related difficulties in other countries involved in international commerce such as shipping and finance. Asset holders may be forced into distress sales. Borrowers typically face higher loan costs and collateral requirements, compared to periods of ample liquidity, and unsecured debt is nearly impossible to obtain. Typically, during a liquidity crisis, the interbank lending market stalls.
While within-country income inequality has increased throughout the globalization period, globally inequality has lessened as developing countries have experienced much more rapid growth.[37] Economic inequality varies between societies, historical periods, economic structures or economic systems, ongoing or past wars, between genders, and between differences in individuals' abilities to create wealth.[38] Among the various numerical indices for measuring economic inequality, the Gini coefficient is most often-cited.
Of the factors influencing the duration of economic growth in both developed and developing countries, income equality has a more beneficial effect than trade openness, sound political institutions, and foreign investment.
Economic inequality includes equity, equality of outcome and subsequent equality of opportunity. Although earlier studies considered economic inequality as necessary and beneficial,[40] some economists see it as an important social problem.[41] Early studies suggesting that greater equality inhibits economic growth did not account for lags between inequality changes and growth changes.[42] Later studies claimed that one of the most robust determinants of sustained economic growth is the level of income inequality.[39]
International inequality is inequality between countries. Income differences between rich and poor countries are very large, although they are changing rapidly. Per capita incomes in China and India doubled in the prior twenty years, a feat that required 150 years in the US.[43] According to the United Nations Human Development Report for 2013, for countries at varying levels of the UN Human Development Index the GNP per capita grew between 2004 and 2013 from 24,806 to 33,391 or 35% (very high human development), 4,269 to 5,428 or 27% (medium) and 1,184 to 1,633 or 38% (low) PPP$, respectively (PPP$ = purchasing power parity measured in United States dollars).[44]
Certain demographic changes in the developing world after active economic liberalization and international integration resulted in rising welfare and hence, reduced inequality. According to Martin Wolf, in the developing world as a whole, life expectancy rose by four months each year after 1970 and infant mortality rate declined from 107 per thousand in 1970 to 58 in 2000 due to improvements in standards of living and health conditions. Also, adult literacy in developing countries rose from 53% in 1970 to 74% in 1998 and much lower illiteracy rate among the young guarantees that rates will continue to fall as time passes. Furthermore, the reduction in fertility rates in the developing world as a whole from 4.1 births per woman in 1980 to 2.8 in 2000 indicates improved education level of women on fertility, and control of fewer children with more parental attention and investment.[45] Consequentially, more prosperous and educated parents with fewer children have chosen to withdraw their children from the labor force to give them opportunities to be educated at school improving the issue of child labor. Thus, despite seemingly unequal distribution of income within these developing countries, their economic growth and development have brought about improved standards of living and welfare for the population as a whole.
Economic development spurred by international investment or trade can increase local income inequality as workers with more education and skills can find higher-paying work. This can be mitigated with government funding of education.[6] Another way globalization increases income inequality is by increasing the size of the market available for any particular good or service. This allows the owners of companies that service global markets to reap disproportionately larger profits. This may happen at the expense of local companies that would have otherwise been able to dominate the domestic market, which would have spread profits around to a larger number of owners. On the other hand, globalized stock markets allow more people to invest internationally, and get a share of profits from companies they otherwise could not.
Resource insecurity
A video explaining findings of the study "Water, energy and land insecurity in global supply chains"
A systematic, and possibly first large-scale, cross-sectoral analysis of water, energy and land in security in 189 countries that links national and sector consumption to sources showed that countries and sectors are highly exposed to over-exploited, insecure, and degraded such resources. The 2020 study finds that economic globalization has decreased security of global supply chains with most countries exhibiting greater exposure to resource risks via international trade – mainly from remote production sources – and that diversifying trading partners is unlikely to help nations and sectors to reduce these or to improve their resource self-sufficiency.[46][47][48][49]
Competitive advantages
Businesses in developed countries tend to be more highly automated, have more sophisticated technology and techniques, and have better national infrastructure. For these reasons and sometimes due to economies of scale, they can sometimes out-compete similar businesses in developing countries. This is a substantial issue in international agriculture, where Western farms tend to be large and highly productive due to agricultural machinery, fertilizer, and pesticides; but developing-country farms tend to be smaller and rely heavily on manual labor. Conversely, cheaper manual labor in developing countries allowed workers there to out-compete workers in higher-wage countries for jobs in labor-intensive industries. As the theory of competitive advantage predicts, instead of each country producing all the goods and services it needs domestically, a country's economy tends to specialize in certain areas where it is more productive (though in the long term the differences may be equalized, resulting in a more balanced economy).
The ratio of German assets in tax havens in relation to the total German GDP. The "Big 7" shown are Hong Kong, Ireland, Lebanon, Liberia, Panama, Singapore, and Switzerland.
A tax haven is a state, country or territory where certain taxes are levied at a low rate or not at all, which are used by businesses for tax avoidance and tax evasion.[51] Individuals and/or corporate entities can find it attractive to move themselves to areas with reduced taxation. This creates a situation of tax competition among governments. Taxes vary substantially across jurisdictions.[52]Sovereign states have theoretically unlimited powers to enact tax laws affecting their territories, unless limited by previous international treaties. The central feature of a tax haven is that its laws and other measures can be used to evade or avoid the tax laws or regulations of other jurisdictions.[53] In its December 2008 report on the use of tax havens by American corporations,[54] the U.S. Government Accountability Office regarded the following characteristics as indicative of a tax haven: nil or nominal taxes; lack of effective exchange of tax information with foreign tax authorities; lack of transparency in the operation of legislative, legal or administrative provisions; no requirement for a substantive local presence; and self-promotion as an offshore financial center.
A 2012 report from the Tax Justice Network estimated that between US$21 trillion and $32 trillion is sheltered from taxes in tax havens worldwide.[55] If such hidden offshore assets are considered, many countries with governments nominally in debt would be net creditor nations.[56] However, the tax policy director of the Chartered Institute of Taxation expressed skepticism over the accuracy of the figures.[57]Daniel J. Mitchell of the US-based Cato Institute says that the report also assumes, when considering notional lost tax revenue, that 100% of the money deposited offshore is evading payment of tax.[58]
The tax shelter benefits result in a tax incidence disadvantaging the poor.[59] Many tax havens are thought to have connections to "fraud, money laundering and terrorism."[60]Accountants' opinions on the propriety of tax havens have been evolving,[61] as have the opinions of their corporate users,[62] governments,[63][64] and politicians,[65][66] although their use by Fortune 500 companies[67] and others remains widespread. Reform proposals centering on the Big Four accountancy firms have been advanced.[68] Some governments appear to be using computer spyware to scrutinize corporations' finances.[69]
Red: U.S. corporate profits after tax. Blue: U.S. nonresidential business investment, both as fractions of GDP, 1989–2012. Wealth concentration of corporate profits in global tax havens due to tax avoidance spurred by imposition of austerity measures can stall investment, inhibiting further growth.
Cultural effects
Economic globalization may affect culture. Populations may mimic the international flow of capital and labor markets in the form of immigration and the merger of cultures. Foreign resources and economic measures may affect different native cultures and may cause assimilation of a native people.[71] As these populations are exposed to the English language, computers, western music, and North American culture, changes are being noted in shrinking family size, immigration to larger cities, more casual dating practices, and gender roles are transformed.
Yu Xintian noted two contrary trends in culture due to economic globalization.[72] Yu argued that culture and industry not only flow from the developed world to the rest, but trigger an effort to protect local cultures. He notes that economic globalization began after World War II, whereas internationalization began over a century ago.[73]
George Ritzer wrote about the McDonaldization of society and how fast food businesses spread throughout the United States and the rest of the world, attracting other places to adopt fast food culture.[74] Ritzer describes other businesses such as The Body Shop, a British cosmetics company, that have copied McDonald's business model for expansion and influence. In 2006, 233 of 280 or over 80% of new McDonald's opened outside the US. In 2007, Japan had 2,828 McDonald's locations.[75]
Global media companies export information around the world. This creates a mostly one-way flow of information, and exposure to mostly western products and values. Companies like CNN, Reuters and the BBC dominate the global airwaves with western points of view. Other media news companies such as Qatar's Al Jazeera network offer a different point of view, but reach and influence fewer people.[76]
Migration
"With an estimated 210 million people living outside their country of origin (International Labour Organization [ILO] 2010), international migration has touched the lives of almost everyone in both the sending and receiving countries of the Global South and the Global North".[77] Because of advances made in technology, human beings as well as goods are able to move through different countries and regions with relative ease.
1 2 Olney, W. W. (2013). "A race to the bottom? Employment protection and foreign direct investment." Journal of International Economics, 91(2), 191–203.
↑ "MOST-FAVOURED NATION TREATMENT"(PDF). UNCTAD Series on Issues in International Investment Agreements II. UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT. 2010.
↑ Irwin, Douglas A. (November 2017). Clashing Over Commerce: A History of US Trade Policy. University of Chicago Press.
↑ Anna., Nagurney (1 January 2006). Supply chain network economics: dynamics of prices, flows and profits. Edward Elgar Pub. ISBN978-1845429164. OCLC317598837.
1 2 3 Spieldoch, Alexandra (2007). "A Row to Hoe: The Gender Impact of Trade Liberalization on our Food System, Agricultural Markets and Women's Human Rights". International Gender and Trade Network.
↑ Pang, Tikki, and G. Emmanuel Guindon. "Globalization and Risks to Health." EMBO Reports.
↑ Strazdins, Lyndall; Welsh, Jennifer; Korda, Rosemary; Broom, Dorothy; Paolucci, Francesco (2016). "Not all hours are equal: Could time be a social determinant of health?". Sociology of Health & Illness. 38 (1): 21–42. doi:10.1111/1467-9566.12300. hdl:1885/109350. PMID26174027.
↑ Herlinger, Chris. "Bangladesh Counts The Human Cost of the Garment Industry. (Cover Story)." National Catholic Reporter 52.14 (2016): 1–16. Academic Search Premier. Web
1 2 Prieto-Carrón, Marina. "Is there Anyone Listening?: Women Workers in Factories in Central America, and Corporate Codes of Conduct." Development 47.3 (2004): 101–05. ProQuest. Web.
↑ Berik, G., and Y. Van Der Meulen Rodgers. "What's Macroeconomic Policy Got to Do with Gender Inequality? Evidence from Asia." Global Social Policy 12.2 (2012): 183–89. Web
↑ Beladi, Hamid; Chao, Chi-Chur; Hollas, Daniel (1 June 2013). "Does globalization weaken labor unions in developing countries?". The Journal of International Trade & Economic Development. 22 (4): 562–71. doi:10.1080/09638199.2011.578752. ISSN0963-8199. S2CID153712681.
↑ Kopczuk, Saez, and Song find that "most of the increase in the variance of (log) annual earnings is due to increases in the variance of (log) permanent earnings with modest increases in the variance of transitory (log) earnings." Thus, in fact, the increase in earnings inequality is in lifetime income. Furthermore, they find that it remains difficult for men to move up the earnings distribution, while women fare better. Kopczuk, Wojciech (2010). "Earnings Inequality and Mobility in the United States: Evidence from Social Security Data since 1937 *". Quarterly Journal of Economics. 125 (1): 91–128. doi:10.1162/qjec.2010.125.1.91. S2CID13073651.
1 2 Berg, Andrew G.; Ostry, Jonathan D. (2011). "Equality and Efficiency". Finance and Development. 48 (3). Retrieved 10 September 2012.
↑ John Whiting, tax policy director at the UK's Chartered Institute of Taxation commented "There clearly are some significant amounts hidden away, but if it really is that size what is being done with it all?" and "If the suggestion is that such amounts are actively hidden and never accessed, that seems odd – not least in terms of what the tax authorities are doing. In fact, the US, UK and German authorities are doing a lot", and noting that if the figures were accurate "you would expect the havens to be more conspicuously wealthy than they are". However, he also admitted that "I cannot disprove the figures at all, but they do seem staggering" "Tax havens: Super-rich 'hiding' at least $21tn". BBC News. 22 July 2012. Retrieved 3 October 2012.
↑ Held, David, ed. (2004). A Globalizing World?: Culture, Economics, Politics (2nded.). London; New York: Routledge, in association with the Open University. p.84. ISBN978-0-203-39219-5.
↑ Yu, Xintian (2002). Cultural Impact on International Relations. Chinese Philosophical Studies, XX. The Council for Research in Values and Philosophy. p.203. ISBN978-1-56518-176-2.
↑ Xintian, Yu (2002). Cultural Impact on International Relations. Chinese Philosophical Studies, XX. The Council for Research in Values and Philosophy. p.204. ISBN978-1-56518-176-2.
↑ Ritzer, George (2010). McDonaldization: the reader/ 3rd ed. Thousand Oak, CA: Sage Publications. p.3. ISBN978-1-4129-7582-7.
↑ Ritzer, George (2010). McDonaldization: the reader/ 3rd ed. Thousand Oak, CA: Sage Publications. pp.5–7. ISBN978-1-4129-7582-7.
↑ Nakayma, Thomas, K (4 January 2011). The Handbook of Critical Intercultural communication. Blackwell. ISBN978-1-4051-8407-6.{{cite book}}: CS1 maint: multiple names: authors list (link)
↑ Benería, Lourdes (2012). "Gender and International Migration: Globalization, Development, and Governance". Feminist Economics. 18 (2): 1–33. doi:10.1080/13545701.2012.688998. S2CID144565818.
Related Research Articles
The economy of Chile is a market economy and high-income economy as ranked by the World Bank. The country is considered one of South America's most prosperous nations, leading the region in competitiveness, income per capita, globalization, economic freedom, and low perception of corruption. Although Chile has high economic inequality, as measured by the Gini index, it is close to the regional mean. Among OECD nations, Chile has a highly efficient and strong social security system; social welfare expenditure stood at roughly 19.6% of GDP.
The economy of Guatemala is a considered a developing economy, highly dependent on agriculture, particularly on traditional crops such as coffee, sugar, and bananas. Guatemala's GDP per capita is roughly one-third of Brazil's. The Guatemalan economy is the largest in Central America. It grew 3.3 percent on average from 2015 to 2018. However, Guatemala remains one of the poorest countries in Latin America and the Caribbean, having highly unequal incomes and chronically malnourished children. The country is beset by political insecurity, and lacks skilled workers and infrastructure. It depends on remittances for nearly one-tenth of the GDP.
A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer by a governmental organization to collectively fund government spending, public expenditures, or as a way to regulate and reduce negative externalities. Tax compliance refers to policy actions and individual behaviour aimed at ensuring that taxpayers are paying the right amount of tax at the right time and securing the correct tax allowances and tax relief. The first known taxation took place in Ancient Egypt around 3000–2800 BC. Taxes consist of direct or indirect taxes and may be paid in money or as its labor equivalent.
The United States is a highly developed/advanced mixed economy. It is the world's largest economy by nominal GDP; it is also the second largest by purchasing power parity (PPP), behind China. It has the world's sixth highest per capita GDP (nominal) and the eighth highest per capita GDP (PPP) as of 2024. The U.S. accounted for 26% of the global economy in 2023 in nominal terms, and about 15.5% in PPP terms. The U.S. dollar is the currency of record most used in international transactions and is the world's reserve currency, backed by a large U.S. treasuries market, its role as the reference standard for the petrodollar system, and its linked eurodollar. Several countries use it as their official currency and in others it is the de facto currency. Since the end of World War II, the economy has achieved relatively steady growth, low unemployment and inflation, and rapid advances in technology.
The economy of Singapore is a highly developed mixed market economy with dirigiste characteristics. Singapore's economy has been consistently ranked as the most open in the world, the joint 4th-least corrupt, and the most pro-business. Singapore has low tax-rates and the second highest per-capita GDP in the world in terms of purchasing power parity (PPP). The Asia-Pacific Economic Cooperation (APEC) is headquartered in Singapore.
An informal economy is the part of any economy that is neither taxed nor monitored by any form of government. Although the informal sector makes up a significant portion of the economies in developing countries, it is sometimes stigmatized as troublesome and unmanageable. However, the informal sector provides critical economic opportunities for the poor and has been expanding rapidly since the 1960s. Integrating the informal economy into the formal sector is an important policy challenge.
Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year. Statisticians conventionally measure such growth as the percent rate of increase in the real and nominal gross domestic product (GDP).
In the economics study of the public sector, economic and social development is the process by which the economic well-being and quality of life of a nation, region, local community, or an individual are improved according to targeted goals and objectives.
Economic inequality is an umbrella term for a) income inequality or distribution of income, b) wealth inequality or distribution of wealth, and c) consumption inequality. Each of these can be measured between two or more nations, within a single nation, or between and within sub-populations.
In economics, income distribution covers how a country's total GDP is distributed amongst its population. Economic theory and economic policy have long seen income and its distribution as a central concern. Unequal distribution of income causes economic inequality which is a concern in almost all countries around the world.
International inequality refers to inequality between countries, as compared to global inequality, which is inequality between people across countries. International inequality research has primarily been concentrated on the rise of international income inequality, but other aspects include educational and health inequality, as well as differences in medical access. Reducing inequality within and among countries is the 10th goal of the UN Sustainable Development Goals and ensuring that no one is left behind is central to achieving them. Inequality can be measured by metrics such as the Gini coefficient.
Economic liberalization, or economic liberalisation, is the lessening of government regulations and restrictions in an economy in exchange for greater participation by private entities. In politics, the doctrine is associated with classical liberalism and neoliberalism. Liberalization in short is "the removal of controls" to encourage economic development.
Economic Freedom of the World is an annual survey published by the Fraser Institute, a Canadian think tank. The survey attempts to measure the degree of economic freedom in the world's nations. It has been used in peer-reviewed studies, some of which have found a range of beneficial effects of more economic freedom.
Income inequality has fluctuated considerably in the United States since measurements began around 1915, moving in an arc between peaks in the 1920s and 2000s, with a 30-year period of relatively lower inequality between 1950 and 1980.
The economic liberalisation in India refers to the series of policy changes aimed at opening up the country's economy to the world, with the objective of making it more market-oriented and consumption-driven. The goal was to expand the role of private and foreign investment, which was seen as a means of achieving economic growth and development. Although some attempts at liberalisation were made in 1966 and the early 1980s, a more thorough liberalisation was initiated in 1991.
Redistribution of income and wealth is the transfer of income and wealth from some individuals to others through a social mechanism such as taxation, welfare, public services, land reform, monetary policies, confiscation, divorce or tort law. The term typically refers to redistribution on an economy-wide basis rather than between selected individuals.
Income inequality in the Philippines is the extent to which income, most commonly measured by household or individual, is distributed in an uneven manner in the Philippines.
Abenomics refers to the economic policies implemented by the Government of Japan led by the Liberal Democratic Party (LDP) since the December 2012 general election. They are named after Shinzō Abe (1954–2022), who had been appointed as Prime Minister of Japan on his second term from 2012 to 2020. Abe was the longest-serving prime minister in Japanese history. After Abe resigned in September 2020, his successor, Yoshihide Suga, stated that his premiership would focus on continuing the policies and goals of the Abe administration, including the Abenomics suite of economic policies.
Causes of income inequality in the United States describes the reasons for the unequal distribution of income in the US and the factors that cause it to change over time. This topic is subject to extensive ongoing research, media attention, and political interest.
Job creation and unemployment are affected by factors such as aggregate demand, global competition, education, automation, and demographics. These factors can affect the number of workers, the duration of unemployment, and wage rates.
Held, David, ed. (2004). A Globalizing World?: Culture, Economics, Politics (2nded.). London; New York: Routledge, in association with the Open University.
Eun, Cheol S.; Resnick, Bruce G. (2012). International Financial Management. McGraw-Hill Education (Asia) and China Machine Press. ISBN978-0-07-803465-7.
This page is based on this Wikipedia article Text is available under the CC BY-SA 4.0 license; additional terms may apply. Images, videos and audio are available under their respective licenses.
