What Is the Global Economic System?

The global system is a reality in modern economics.

The global economic system refers to the arrangements and institutions that unite the world's economies in one global marketplace. Developments in international economics since World War II have led to the global system that exists today.

Features

The global economic system allows nations to engage in international trade, exchanging goods and services. The system also allows labor and capital to move more freely around the world.

History

A 1944 meeting of delegates from 44 nations in Bretton Woods, New Hampshire, laid the foundation for the modern global economy.

Identification

International organizations such as the International Monetary Fund (IMF) and the World Trade Organization (WTO) are important institutions in the global economic system.

Effects

Global trade agreements such as the North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT) helped accelerate globalization, opening markets around world to an expanding range of goods and services.

Benefits

The global economy has allowed consumers access to an expanding range of goods and made it possible for investors to seek opportunities around the world.

References

• The Political Economy of International Relations, Robert Gilpin, 1987
• Introduction to International Political Economy, David N. Balaam and Michael Veseth, 1996

Resources

• World Economic Forum
• World Trade Organization
• International Monetary Fund