Tuesday, September 30, 2008

Geography of the Global Economy

In light of the recent tumultuous events shaking the United States' economy, and subsequently the world economy, I thought an entry here about the geography of the global economy (which is directly linked to the geography of globalization) would be interesting.

Here is a link to an interesting learning module about the geography of the global economy, courtesy of the Association of American Geographers:
Global Economy Module

Concerning geographers' study of the global economy, the learning module states that "Geographers study the spatial activities of economies at different scales. In the global economy, these activities include patterns of international trade, the flow of information through communication networks, regional flows of capital and resources, and the spatial distribution of labor. Increasingly, economic processes and patterns are affected by globalization - a process by which 'events, activities, and decisions in one part of the world can have significant consequences for communities in distant parts of the globe' (Haggett, 2001)" (Global Economy Module - Lesson 1).

The Global Economy learning module goes on to state that: "The global economy is a very complex system linking nations through the trade and flow of goods, services, and information. Geographers are interested in how globalization affects the spatial arrangement of economic services and activities; how this arrangement affects local and national economies; and how local and national economies contribute to the form and function of the global economy. They are interested in issues such as the relocation of economic activities and jobs from high-wage to low-wage countries; the role of information technologies in building electronic networks of commerce; the formation of economic blocs such as the North American Free Trade Association (NAFTA) and the European Union (EU); and the spectacular growth of newly industrialized economies, most notably in Pacific Asia" (Global Economy Module - Lesson 1).

Additionally, the module states that "The importance, extent, and sheer economic scale of these spatial changes, most notably during the 1970s and 1980s, took many governments and industrial enterprises by surprise. Many governments struggled to react in the face of the industrial and labor relocations that took place and to recognize that the foundations of the new economy were no longer locally or nationally based, but were now global. Likewise, private firms had to adapt by restructuring their production systems to consider the most effective and efficient means of doing business in a global market" (Global Economy Module - Lesson 1).

Globalization and the global economy are obviously very geographic and warrant the study by geographers and others. With all the upheavals currently occurring the the U.S. and global economies, it is important for people to gain a better understand of the foundations of the current system and to understand how and why globalization occurs and how and why the global economy is the way it currently is.


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