The paper 'The Main Features of an International Economy ' is a great example of a Macro and Microeconomics Case Study. The international economy refers to the integrated world economy that takes place among regions and nations of the world (Gilpin & Gilpin, 2001). One of the common characteristics of the international economy is the mutual understanding and trade agreements that control the movements of goods and services among nations. In recent years, the international economy has been highly boosted by the ongoing globalization of the world economy, among other factors.
These necessitated the free movement of goods and services, labor transnational, as well as less restriction in terms of laws (Lowenfeld, 2008). This depicts a bigger picture of the increasing interconnectedness of nations with free movement of capital across regions, meaning that it is not possible to understand the international economy in isolation. The following paper seeks to discuss the international economy, by looking at its features as well as the factors that lead to the growth of the international economy in the 19th century. Other considerations will be the factors that are affecting the current global economy. Overview of International Economy There have been dramatic changes over the years as far as the growth of the international economy is concerned.
The industrial revolution in Europe, migration of people from one continent to another, formed the foundation of the current state of the world economy (Kenen, 2006). However, there have been other forces, which have shaped the current economic status, such as globalization. As noted above, globalization, which refers to the integration of the consumption as well as the production in all world markets, has contributed a lot to the growth of the international economy.
It is evidently true that globalization has necessitated the growth of economies of all countries in the world thus integrating them into the global economy (Carbaugh, 2013). Political, economic, and social decisions of individual countries are taken into consideration of the impact on a global front. As a result, narrow provisional ideals have been disregarded in total awareness of the mutual coexistence among nations. It is for this reason that nations have come to realize the advantages that globalization has come to play in the international economy. The international economy is the entire economy of the world having a unified market for all services and goods being produced in the world.
The push and pull factors of the international economy help domestic producers to expand their market and thus raising their capacity based on the demand and supply factors in the world (Rolf et al, 2011). At the same time, it provides an opportunity for domestic consumers to choose products and services from an array of imported goods in their respective countries.
There have been efforts to rationalize all prices of goods and services available in the world across all markets. However, this calls for concerted efforts among nations. Some of the latest developments in the international economy include the reduction of tariffs as well as quotas driven by world trade organization (WTO). This has seen the flow of goods and services from developed to less-developed nations become easier (Kumar, 2008). Further, there is an emergence of Trans-National Companies or the Multi-National Companies, which is due to globalization.
The introduction of these multinational firms in international trade has seen more connections to the world markets. The net result is that the consumer benefits from having a wide variety of goods and services to select. At the same time technological advancement, which has been happening in the world has played a great role in the growth of the international economy (Bayne & Woolcock, 2007). This technological development has permeated into developing countries from developed ones such as the USA and Japan. This has led to people in these countries be able to acquire technical skills as well as knowledge in developing their economies through operating sophisticated equipment.
The result of such realities is the increase in income levels of these countries.
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