4. Goldman Sachs Projections
Largest economies
in 2003
Largest economies
in 2025
Largest economies
in 2050
USA
Japan
Germany
UK
France
China
Italy
India
Brazil
5. Goldman Sachs Projections
Largest economies
in 2003
Largest economies
in 2025
Largest economies
in 2050
USA USA
Japan China
Germany Japan
UK Germany
France India
China UK
Italy France
India Russia
Brazil South Korea
6. Goldman Sachs Projections
Largest economies
in 2003
Largest economies
in 2025
Largest economies
in 2050
USA USA China
Japan China USA
Germany Japan India
UK Germany Japan
France India Brazil
China UK Mexico
Italy France Russia
India Russia Germany
Brazil South Korea UK
7. Globalisation and the UK
• The UK is a highly open economy
• Strong trade links with other countries
• Over a quarter of our annual GDP is exported
• Open financial (capital) markets
– Bonds
– Equities
– Property
• We have a fairly open labour market – tolerant of inflows of
workers from overseas
• Globalisation creates opportunities and threats
• The key is to be internationally competitive
8. Opportunities and benefits for the UK
• Cheaper imports from emerging market countries
– Keeps down inflation and interest rates
• Potential for increasing export sales
– Which markets are we best at?
• Opportunities for overseas investment
– Mergers and takeovers
– Direct investment (e.g. new factories overseas; out-sourcing of
manufacturing)
• Opportunities arising from migration of labour
• Opportunities of rapid technological change
9. Threats for the UK economy
• Threats to our manufacturing industries
• Risk of structural unemployment
• Widening of the rich-poor divide – more inequality
• Social and economic tensions from migration
• Threats to the global environment – this affects us all
• Inflationary risks from higher energy and metal prices
• Property boom and bust – think about the origins of this
• Takeover of UK businesses from overseas?
• Risks of return to protectionism
10. Threats to current globalisation wave
• Resurgent inflation
– Commodities – including metals and foodstuffs
– World Bank: Food price crisis is the ‘silent Tsunami’
– Wages
• Widening income & wealth inequality within countries (rich and poor)
• Bursting of the financial euphoria / bubbles
• Huge trade imbalances
• Increasing distrust of big business
• Growing pressure for
– Economic nationalism / trade protectionism
– Shift away from multi-lateral trade towards bi-lateral trade agreements
• And the threats to the global commons – perhaps the biggest market
failure of all time
13. Trade barriers are back!
• With the world struggling to come out of recession
and economic growth stagnant, barriers to trade
are once again on the rise!
• US angry at Chinese trade barriers
• Questions for discussion:
• Why would countries want to erect trade barriers?
• How can the UK remain competitive in this new
globalised world?
14. Ten Key Tips!
1. Use diagrams and ensure they are clear and annotated
2. Use the sources provided (where appropriate)
3. Use plenty of real world examples - often exam questions
will say “using the data and your own knowledge”
4. Use precise terminology – learn your definitions well
5. Pick up on ‘trigger words’ in the exam question i.e. solely,
inevitably
15. Ten Key Tips!
6. Answer the question but back up any assertion made with
evidence or examples
7. Avoid repeating yourself in a conclusion – try to bring
something new into the discussion
8. Practice drawing key diagrams
9. Read one topical economics article every day
10.When writing essay answers – leave a line between each
paragraph
Editor's Notes
What is driving globalisation?
I would suggest three key factors
Firstly technological change; secondly, the liberalisation of markets for goods, services and capital and the end of communism which has brought about a shift towards market forces as a means of allocating scarce resources.
Thirdly the impact of containerisation and other processes as a means of transporting goods around the global economy.
Perhaps we can add a fourth driver of globalisation, the increasing flows of labour within and between countries.
Labour migration is a hugely important topic and one we may return to in questions at the end.
A health warning – these are projections
And projections this far out are subject to huge uncertainty.
The dreams of a country are often far removed from the reality.
But the Goldman Sachs figures are produced on the back of some pretty impressive analysis and we will touch on some of their ideas in the next few minutes
For the moment, it might be worth considering for a few seconds, how the landscape of the world economy will change.
A health warning – these are projections
And projections this far out are subject to huge uncertainty.
The dreams of a country are often far removed from the reality.
But the Goldman Sachs figures are produced on the back of some pretty impressive analysis and we will touch on some of their ideas in the next few minutes
For the moment, it might be worth considering for a few seconds, how the landscape of the world economy will change.
A health warning – these are projections
And projections this far out are subject to huge uncertainty.
The dreams of a country are often far removed from the reality.
But the Goldman Sachs figures are produced on the back of some pretty impressive analysis and we will touch on some of their ideas in the next few minutes
For the moment, it might be worth considering for a few seconds, how the landscape of the world economy will change.
