TMJC 2025 J1H2 C1 Lecture 1 Global Economy Notes

1 What is the Global Economy? The global economy is complex, characterised by dynamic geographies and interactions between multiple actors at different scales. The global economy connects places at different scales and creates interdependence between them. We can think of the global economy as the flows of trade, capital and labour throughout the world. Trade generally refers to the buying and selling of goods and services. International trade refers to the buying and selling of goods and services between countries. Capital refers to money invested with the intent of generating more money. Labour generally refers to the people who work for gain, often in terms of wages. Labour is often regarded as a location-specific factor of production that affects where a firm may choose to locate its relevant operations. How do levels of development vary across space? Development can be thought as an improvement from the current state. Development is a MULTI-FACETED CONCEPT Economic Development: Improvement in Gross Domestic Product (GDP) or Gross National Product (GNP) of a country. Able to have economic prosperity, able to translate economic gains into social improvement. Social Development: Improvement in the society, well-being of people in the country, better healthcare, higher literacy rate, higher Standard of Living, improvement in quality of life, better food and nutrition. Environmental Development: Development in the environmental aspects – not polluting and overly exploiting the environment, but trying to improve air, water, land quality while allowing various ecosystems to thrive. When we think of differences in levels of development, we tend to usually associate it with the idea of economic development, it is important to note that it is not the only form of development, but we will focus on economic development for now. Higher 2 (9173) Cluster 1: Development, Economy and Environment TMJC Cluster 1 Lecture 1 Geography of the Global Economy – Structure of the Economy and NIDL 2025

2 In essence, countries have different levels of economic development and a group of countries can also be considered a Macro-Region. For our syllabus, we will follow the definition of Macro- Region created by the World Bank. World Bank Country and Lending Groups For the current 2024 fiscal year: Low-income economies are defined as those with a GNI per capita, calculated using the World Bank Atlas method, of $1,135 or less in 2022; Lower middle-income economies are those with a GNI per capita between $1,136 and $4,465; Upper middle-income economies are those with a GNI per capita between $4,466 and $13,845; High-income economies are those with a GNI per capita of $13,845 or more What Is Gross National Income (GNI)? Gross National Income (GNI) is the total amount of money earned by a nation's people and businesses. It is used to measure and track a nation's wealth from year to year. The number