Globalisation New Challenges: Macroeconomic, International Trade and Financial Issues

Abstract

The world is currently witnessing the third wave of globalisation, certainly the most widely debated and fiercely contested. The first wave, known as the ‘Age of Exploration’, began with the Portuguese discovery of the sea route to India, in 1498, followed by the exploration of the American continent in the two subsequent centuries. The second wave took place in the nineteenth century, with the multiplication of international relations, much reinforced by unprecedented improvements in means of communication and transportation. By then, dozens of sophisticated stock and bond exchanges existed in many countries and financial integration attained levels comparable to those observed today. European investors were advised to internationally diversify financial applications, and English, French, Dutch and German capital flew in torrents to finance infrastructures in Russia, Asia, Africa and America. Most of these links were broken with the First World War, and subsequent episodes such as the Russian Revolution and the Great Depression contributed to maintain some degree of suspicion over international economic relations. The third wave of globalisation did not start until much later in the twentieth century, fostered by the coordinated action of politicians and economists. Naturally, the globalisation phenomenon has been addressed from a variety of distinct perspectives. It was initially a matter for philosophers, concerned with the consequences of the annihilation of space, resulting from the development of the means of transportation, especially with the expansion of railways. Later, social scientists broadened the analysis and provided more comprehensive assessments of the causes and effects of increased cross border relations. More recently, the economic perspective has gained prominence, to the point of being currently common to confound the concept of globalisation with that of economic globalisation. In economic terms, globalisation comprises the international flow of goods, services, capital and labour and has been greatly enhanced by both technological progress and a political will to overcome the barriers imposed by national boundaries. With uneven positive and negative effects across countries and societies, the globalisation of economic activities is a fertile source of new problems and challenges for decision makers, academics and practitioners. In this book, some of the new challenges posed by globalisation to different research areas of the economic science are addressed. Attention is mainly focused on the implications of free trade and financial integration, but political consequences are also examined. The contributions of different authors have been selected from those presented and discussed at the 10th INFER International Conference, held in Évora, Portugal, coincidently close to the birth place of Vasco da Gama, the intrepid promoter of the first globalisation wave.