Globalization Capital Accumulation and Terms of

Authors: Karl Farmer Matthias Schelnast

Publish Date: 2013

Volume: , Issue: , Pages: 259-277

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Abstract

This chapter is devoted to developing elements of an economic theory of globalization At the beginning different aspects of the globalization of markets and production are considered and the main causes of the globalization process since the early 1970s are enumerated To entangle the economic consequences of two of these main causes a comparative static analysis is used first Since the integration of populous developing countries into the world market economy changes their factorproportions the simultaneous dynamics of regionspecific factor proportions and terms of trade are analyzed in an intertemporal equilibrium of the HeckscherOhlin twocountry model In view of rather high savings rates of Asian economies a termsoftrade improvement for these emerging economies can be foreseen To check this rather optimistic longrun result Krugman and Venables’ Quartely Journal of Economics 110 857–880 1995 mediumrun coreperiphery globalization model is finally analyzed

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