Download financial flows - Ms Topping`s IB Geography page

Survey
yes no Was this document useful for you?
   Thank you for your participation!

* Your assessment is very important for improving the work of artificial intelligence, which forms the content of this project

Document related concepts

Debt wikipedia, lookup

Financialization wikipedia, lookup

Bretton Woods system wikipedia, lookup

Global financial system wikipedia, lookup

Public finance wikipedia, lookup

Currency war wikipedia, lookup

Global saving glut wikipedia, lookup

Currency War of 2009–11 wikipedia, lookup

Reserve currency wikipedia, lookup

Corporate finance wikipedia, lookup

1998–2002 Argentine great depression wikipedia, lookup

Transcript
Compare the roles of different economic flows in the transfer of capital
from core to periphery
You have 3 minutes….to draw this and annotate
• Now swap with your neighbour and assess for
1) STRENGTHS
2) WEAKNESSES
You also need to add in syllabus statements
from the global interactions course
OUTSOURCING!
Key ideas
• A range of flows of finance create global
networks.
• Countries become dependent upon one
another for economic success.
• Decision makers at national and international
scales have influence over flows
• From the video
• 1) Write down the key terminology
• 2) Write down the key ideas (1 sentence each)
Basics of economic flows
•
•
•
•
•
•
•
•
•
Lenders
Borrowers
Transactions
Credit
Asset
Liability
Market
Debt
Interest
International capital flows
• The importing of a good or a service (think
outsourcing)
• Flows from core to periphery: Core can receive
higher rates of return than otherwise
• Workers in resource rich peripheral areas can
access capital they need to increase
productivity and wages
Capital
• Financial or physical assets which can generate income,
such as property or investments.
• Capital is one of the factors of production, it is the
stock of man-made resources used in the production of
goods and services. The other factors of production are
land, labour and entrepreneurs.
• Money is just a representation of goods or resources try building a boat on a deserted island with just a
pocket full of Euros.
Geographyalltheway
e.g.
• Core (UK)
Asset rich
Home of TNCs
Capital rich
Periphery(Kenya)
Human resource
Land resources
need for capital
When a country’s imports exceed its exports, it has a
current account deficit
• Since 2002 – net flow to the developed world
of $229 billion
• $784 billion in 2006
• Hard currency – long term and reliable value
of a currency
• Soft currency – likely to depreciate or
fluctuate against other currencies
• Therefore LICs / NICs have felt the need to
increase their hard currency reserves.
• Therefore their currency reserves will be less
likely to lose their value.
• E.g. investment in gold instead of soft
currency which may be worth very little in a
few months time.
Types of flows
•
•
•
•
•
•
Loans
Debt repayment
Remittances
FDI
Aid
Repatriation in the transfer of capital
Homework
The influence of decision makers
Task:
• Find out the headquarters of the world trade
organisation, the international monetary fund and
the World Bank.
• What do they do?