Concept and stages of world’s economy development

The worlds economics is difficult system. All set of national economies is fastened by the movement of goods, services and factors of production. On this basis between the countries there are international economic relations, i.e. the economic relations between residents and nonresidents.
Concept and subjects of the world economy.


In domestic and foreign literature there are various approaches to definition of the concept “world economy”. The most important of them are:

  1. the world economy – set of the national farms connected with each other by system of the international division of labor. Such definition is based on idea of the world economy as to the sum of national economies;
  2. the world economy – world system of the production and financial relations. The main components of the world economy – the sphere of real production and the sphere of the address found reflection in such approach;
  3. the world economy – set of the national and state and non-state structures, and also their interactions on the basis of the international division of labor and political contacts. In this treatment the world economy represents a common economic space (mega-economy) in which act as subjects of the economic relations: national economies of the countries of the world; subjects of world business – multinational corporations and their alliances; institutes of the world economy – the international economic organizations.

National economies of the countries of the world – the most important subjects of the world economy. In the world more than 180 states are. With various indicators of economic development, it is accepted to distinguish various groups of the countries classified by essential signs from a significant amount of the states.

Multinational corporation – the largest companies of the world which on the sphere of the activity are international, but having the national capital in the country of basing.

For the beginning of the XXI century in the world about 70 thousand multinational corporations and 850 thousand their branches were. About 50 thousand parent companies are located in the developed countries. About 50% of world production and 2/3 foreign trades of the world fall to the share of multinational corporation. Capitalization of each of the largest multinational corporations of the world which is in the first ten makes some honeycombs of billions of dollars.

Distinguish the enormous size of multinational corporation which are presented by huge industrial and financial complexes with turns to some billion dollars, and also a role of multinational corporation which is defined by importance of branches of economy where interests of corporations are concentrated from features of modern multinational corporations. These are the advanced knowledge-intensive branches of manufacturing industry which are closely connected with scientific and technical progress: automobile, electronic, chemical, pharmaceutical, etc.

The international economic organizations – institutes of the world economy which role especially increased in the last decades. The majority of the international economic organizations – non-state, their about 3000. Such known organizations as the WTO, the IMF, OECD, etc. treat them. Other group of the organizations – interstate, their about 400.

Stages of development of the world economy

The world economy began to develop long ago. Everything began with world trade which represents set of foreign trade of all countries of the world. At the most ancient stages of human history the whole people could adjoin directly with each other. Such contacts arose at migrations, mass begstvo from natural disasters, at power sections of territories, exchanges.

Residents of the first-ever state of (Egypt) traded with the next tribes more than 5 thousand years ago, buying from them wood, metals, cattle in exchange for products of craft and agriculture. They also organized expeditions for economic development of new lands. In the same time the tribes living in the territory of Russia exchanged goods with the next tribes.

Dealers in services began to be connected to international trade in goods. Phoenician and Greek merchants not only traded across all Mediterranean in goods, but also rendered services in transportation of goods and overseas passengers.

The Area of Mediterranean and the Black Sea together with the adjacent countries of the Western Asia became that the region of the world where in an extreme antiquity the kernel of the world economy arose. Gradually other economic regions of the world – the Southern Asia, then Southeast and East Asia, Russia, America, Australia and Oceania, regions of Tropical Africa joined in the beginning it.

The big contribution to formation of world trade by goods and services was brought by active distribution of the market relations, great geographical discoveries of the XV-XVII centuries, emergence in the XIX century of the machine industry and modern automobiles and communication.

Columbus, Vasco da Gama, Magellan expeditions moved apart limits of the world market many times over, having attached to it new regions. Economic communications with these regions were strengthened after the beginning of mass manufacturing of finished products in the XIX century in Western Europe in the beginning, and then in North America, Russia and Japan. It were simple and cheap consumer goods. Their sale was promoted by steamships, the railroads, telegraph. As a result by the end of the XIX century there was a world market of goods and services.

At the same time in the world the movement of factors of production amplified (the capital, labor, enterprise abilities, technology). Streams of economic resources went in one direction – from the most developed countries in less developed. The British, French, Belgian, Dutch and German capitals were a noticeable element of accumulation of the capital in America and Russia, emigrants from Europe mastered open spaces of North America, South Africa, Australia.

Then process of movement of economic resources became more complex: the capital, enterprise abilities and technology began not only to be imported, but also to export the moderately developed countries, and underdeveloped countries actively participated in export of labor also. As a result, the international movement of factors of production becomes mutual.

After the world economy developed at a turn of the XIX-XX centuries, it underwent considerable changes. In the course of evolution of modern world economy allocate some stages:

  1. The end of XIX – before World War I. It is a stage of strengthening of openness of world economy. The raw orientation of world trade prevailed. However, the export share constantly grew;
  2. The period between the First and Second world wars. It was characterized by the instability and crises accompanying development of world economy. The tendency to an autarchy of national farms and protectionism, and also to decrease in a role of export amplified;
  3. Period of the 1950-70th years of the XX century. The stage is characterized by emergence of integration groups (the EU, SEV), there is a transnationalization process, active movement of technologies, enterprise abilities and the capital, the world market of the loan capital was restored. The socialist and developing states began to apply for a special role in the world economy.
  4. The period – the 1980-90th. The developed countries pass into an era of post-industrialization, many developing countries overcome economic lag (China and NISY), a former communist block passes to market economy.
  5. The end of XX – the beginning of the XXI century – the present stage of formation of the world economy. It is distinguished by the increased extent of development of geographical space, formation of the international productive forces, strengthening of economic interaction and interdependence. The introduction of the world economy in a new stage of development is followed by enhancing cooperation between the countries in the economic sphere.

Indicators of development of the world economy

For carrying out the analysis of an economic situation of the world economy the system of the indicators characterizing a state and dynamics of the modern world economy is used. The most important of them are:

  1. National wealth of the country in general and per capita. National wealth – set of the saved-up resources of the country, reduced by the cost of its financial obligations.
  2. In world practice it is accepted to include in national wealth such elements as production assets, non-productive assets (the earth, houses and the used natural resources), the capital intangible assets (intellectual property) and financial assets (money, gold, securities, etc.).
  3. The gross internal product (GIP) – the market value of the final goods and services made in the territory of this country in a year – one of the most often applied indicators of world economy. GDP per capita – the most important indicator of world economy, pays off usually in US dollars. Growth rate of GDP is also estimated as the most important indicator of economic growth of the country, most often on average in a year. An indicator of 3-4% – normal rate of economic growth of the country. Growth rate of GDP at the level of 6–10% a year is high;
  4. Indicators of participation of the country in the international economic relations. They are diverse. Distinguish such often applied indicator as the foreign trade quota from them – percentage of the sum of export and import to GDP. Other indicator – the foreign trade turnover per capita counted as the average cost volume of export of the country falling on the citizen of this country.

Modern world economy

At the beginning of the XXI century the world economy finds new quality, globalization becomes the major form and at the same time new stage of which internationalization of economic life. By definition of experts of the IMF, this phenomenon represents the growing economic interdependence of the countries of the whole world as a result of the increasing volume and variety of the international transactions with goods, services and world streams of the capital, and also thanks to more and more fast and broad diffusion of technologies. Thus, globalization represents process of the movement to the world economic, financial, information and humanitarian space causing overcoming of the state barriers on the ways of the movement of information, the capitals, goods, services and increase of a role of supranational institutes of regulation of economy.

The main driving forces of process of globalization are deepening of the international division of labor and information revolution. Sharply degree of openness and interdependence of national farms increases. Global economic processes become dominating, and the center of gravity of enterprise strategy moves with national on supranational level. The national state gradually loses opportunity effectively to use traditional levers of macroeconomic regulation (import barriers, export subsidies, rate of national currency, a rate of refinancing of the central bank) and is compelled to be guided in the economic policy by world tendencies.

Now the logic of evolution led the world economy from internationalization of an exchange to internationalization of the capital and production. During competitive fight between the countries there was a system of the international division of labor which finds the expression in steady production of goods and services in the certain countries over internal requirements counting on the international market, and is based on the international specialization and the international cooperation.

Economic rapprochement and interaction of the countries at the regional level became other important tendency in development of the modern world economy. The international economic integration represents process of economic and political association of the countries on the basis of development of deep steady interrelations and division of labor between separate national farms. The highest form of interstate economic integration is the economic and currency union. Integration processes gained the greatest development in Western Europe (EU) and North America (North American association of free trade).

Besides integration associations quite noticeable place in processes of interaction in the economic sphere of the certain states is taken by associations of the manufacturing countries and exporters of raw materials, free economic zones. Thus, the world economic relationship which is shown in internationalization of production and integration led to strengthening of interrelation of separate national economies, formation of integrity of the world economy.