Domestic Growth and the World Economy

A. Why might the development of a nation's domestic economy cause a transformation in the world economy? In the most basic terms, any nation's domestic economy is one (predominantly geographical) sector of the world economy, so the development of its economy automatically implies some change in the overall world economy. If the country involved is a large one, or its economic development is extraordinary, the impact of that development on the world economy will be proportionately greater.

However, this merely statistical interpretation is somewhat reductionist. The world economy is not only the arithmetic sum total of national economies, it is also the product of the interaction of those economies. In particular, nations engage in trade with one another. Their patterns of trade reflect a host of economic specializations, just as any local economy comprises a host of exchanges of specialized goods and services.

Thus, one nation may have a competitive advantage in agricultural products, another in heavy industrial goods, and yet another in financial services. The patterns of trade, at any given time, reflect these specializations and advantages, and tend to reinforce them. If you are carmaker to the world, continued investment in auto plants is a more natural course of action than investment in other products in which other economies have leadership.

However, the development of a national economy is rarely linear and proportional. As it grows, som

Related Essays

Japan's Contribution to the World Economy .... and developed into a major player in the world economy.25 The .... During this current phase of economic development in Japan, growth in gross domestic output is .... (3740 15 )

The Capitalist World-Economy Concept .... (1984). The Trilateral imprint on domestic economics. In Sklar, Holly. .... Thirlwall, AP (1990). Growth and development. .... (1979). The capitalist world-economy. .... (3275 13 )

Post WWII Growth of the Italian Economy .... country's growth than the analysis of Gross Domestic Product (GDP .... WWII to an extrapolation of the average growth before 1914 �in other words, pre World War I .... (1668 7 )

Japan's Post-WWII Economic Recovery .... the storm, however, and developed into a major player in the world economy. .... this phase of economic development in Japan, growth in gross domestic output was .... (842 3 )

US Natioinal Security & the Domestic Economy .... LAGGINGPRODUCTIVITY GROWTH Lagging productivity growth affects the .... manu facturers in both domestic markets and .... The world's press provides a continuing stream .... (3348 13 )

e. Indeed, some major computer makers do not actually manufacture anything; they assemble a combination of subsystems, often according to a customer's particular desires, with the range of "options" limited mainly by customers' ability to determine what they want amid a bewildering range of possibilities. Most of the work done in producing these goods goes into developing and refining the design. If assembly-line work simplified most tasks as compared to the traditional workshop, high-tech design does the opposite. The work of a computer programmer cannot be timed by a stopwatch. Programming remains largely an art, and programmer productivity remarkably hard to measure. "Lines of code per hour" is a nearly useless measure, since a particular skilled programmer may find a way to perform a task with fewer lines of code (and, probably, the code will run faster and more reliably). The military-style organization that performed so well in high-volume production is quite unsuited to this type of high-value production. Hierarchical lines of authority on an organizational chart are not helpful, when crucial innovations may come unexpectedly out of any working group. The structure of a company making these high-value product

Category: Economics - D