International Economics and Business Nations and Firms in the Global Economy

We provide an introduction to the world economy. World population levels have risen drastically since 1800, in conjunction with (per capita) income levels. Economic leadership regularly shifts from one country to another. Rich countries are usually well connected in terms of international trade, contacts, investments, migration and capital flows. Historians have identified two big ‘waves’ of economic globalisation: at the end of the nineteenth century and after World War II. These episodes show decreases in international price gaps and increases in relative international trade- and capital flows. The ‘fragmentation’ process, in which different parts of goods are provided in different nations before they are combined in final goods, is a relatively new phenomenon. The most recent wave of globalisation is slowing down at the moment (slowbalisation), but it remains to be seen how much the backlash against globalisation will affect trade- and cross-border investment in the years to come.