The Main Features of the Global Economy and Examine the Extent of Interdependence Between Economies Has Affected the Australian Economy.

Economics Essay:

Describe the main features of the global economy and examine the extent of interdependence between economies has affected the Australian economy.

The global economy refers to the expansion of economies beyond national borders, in particular, the expansion of production by transnational corporations to many countries around the world. The global economy includes the globalization of trade, finance and communication, investment and labour. These main features of the global economy affect Australia through primarily structural change and the resource boom.

Globalisation was characterised by high levels of integration. This era began in the 1980’s with the introduction of transport, such as shipping and containerisation and the development in communication, predominately the internet. These developments facilitated the emergence of the global economy. And due to globalisation, domestic economies have become increasingly integrated and consequently their performances are becoming increasingly synchronised

Trade has grown rapidly recently due to globalisation. Trade is the importing (buying) and exporting (selling) of goods and services (G&S) internationally. International trade has allowed for countries to specialise in their comparative advantage as structural change will shift resources to these sectors. The size of the gross world product; which is the sum of the total output of G&S by all economies in the world in a period of time, is nine times its level in the 1950’s and the volume of the world trade has grown to thirty three times its 1950s level.

International finance is the most global feature of the world economy because money can be transferred at a higher rate than people and G&S. Global finance is the short term speculative shifts of money. Global finance refers to the foreign exchange market which is volatile as speculates have 95% ownership. The daily turn over in global foreign exchange markets in 3.2 trillion, this is...