Development of the regions of the world economy

1. Development of the regions of the world economy dr. László Jeney associate professor jeney@elte.hu Economic and Human Geography bachelor study programmes (BA) Spring term 2018/2019. CUB Institue of Economic Geography, Geoeconomy and Sustainable Development

2. Definition and characteristics of world economy 2

3. Evolution and actors of world economy Modern world economy developed by a long historical evolution 15th–16th century (at the Age of Discovery): the appearance of only the world market 18th–19th century (at the age of classical capitalism): the appearance world economy At the same time with the apprearance of national economy The essence is derived from the capitalist social formations A system with more actors National economies: oldiest actors Transnational companies (tnc) International organizations: newest actors 3

4. Similar concepts World economy > aggregate of national economies Internationalization of forces of production More effective allocation of resources Global problems can be solved only on this level (more and more questions arises what should be internationally dealt) Processes of world economy determines the ones of national economies World economy > world market ( only the interactions among the national economies) World economy < world system ( system of ethnical, cultural, military relations as well) 4

5. Universality but diversity A world-wide economic unit of the mankind Even if hundred millions don’t integrated to the circulation False statement: coexistence of a capitalist and a socialist world economies and world markets Unified world market: connects with similar relations systems with different development Main character of the contemporary world economy: diversity Lowest 25% of the countries: GNP per capita < 500 $ Highest 10% of the countries: GNP per capita > 20000 $ Informational society (internet)  caravan routes (Post-)modern  traditional pre-capitalist organizations Conflicts instead of peaceful coexistence GDP of thecountriesofthe World (onppp), 2015. Source: Worldmapper 5

6. Main characteristics of the global core–periphery relationship 6

7. Wallerstein: theory of core–periphery Wallerstein: new theoretical system: world economy forms an organic whole Determined socio–economic structure The extreme poles: cores and peripheries Core: action centre of fields, growth poles, hegemonic country at the top (West-Eu, USA, Japan) Semi-Periphery: on the inner margin Periphery: on the outer margin Rostow, Friedman: theory of economic growth 7

8. Historically changing cores and peripheries Cores and peripheries existed even before the appearance of the world economy (classical capitalism) But: the achievement of the relationship only later Historically changing, but reproductive shaped  not predestination More core appeared and disappeared along the history (e.g. Egypt, Mesopotamia) The catching-up was successful by more peripheries (e.g. North America, Japan, Southeast Asia) 8

9. Historically changing cores and peripheries The falling behind means other results at different ages Being Core or Peripehery matters since the evolution of the formation of capitalist production, the world economy (since then it became important) Core–periphery relationship evolved in more dimensions: economic and political  determines the international factors of trade Asymetric mutual interdependence Mutual: action centre and gravity zone: different efficiency advantages  specialization of national economies  world wide specialization Asymmetric: the extents of dependence, advantages of specialization are not equal 9

10. Core–periphery Power of Core derives from its higher development Its interest: the establishment of the asymmetric dependence (e.g. military, assimilation, trading relations) Core–periphery relationship: connection of the power centres evolved in large economic macroregions and their gravity zones Characteristic economic macroregions: America, Europe–Africa, Far East The relations of the action centres to each other is also changing  the spatial structure/pattern of world economy also changes 10

11. Economic geographic division of the World Classic – 5 continents (Europe, Asia, America, Africa, Australia-Oceania) World economic position: 2 (Brandt line: North and South) or 3 units (Core, Semi-Periphery, Periphery) Macroregions of the world economy – 3 units: America, Europe-Africa, Far East Cultural regions 11