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World War I
Britain, France, and Russia fought against Germany and Austria-Hungary to protect and expand their colonies. The war was also fueled by several other factors.
-Countries wanted to expand their colonies for trade and economic benefits.
-Many jobs were focussed on the war.
-Costs of war were high and many countries were heavily in debt.
-Followed by a recession
-International trade was restricted while countries recovered.
-World production of goods was significantly lower after the war. -
The Russian Revolution
Revolution and civil war broke out in Russia because of the crumbling ancient economic system and the lack of industrialization.
-Negatively affected the expansion/process of economic globalization.
-Russian economy shut down when better wages and working conditions were not supplied to soldiers and peasants.
-Transportation systems shut down.
-The USSR, a new economic/political model, emerged from former Russia. -
First Transantlantic Flight
May 8-31, the seaplane NC-4 of the United States Navy successfully crossed the Atlantic
-Created opportunities in commercial, diplomatic, and and military pursuits.
-Created a whole new industry and eventually fueled the touristry industry.
-Created a whole new potential for warfare, which in itself affected the global economy eventually. -
Russian Civil War ends and Soviet Union emerges
The USSR emerged after the revolution, making the Soviet Union the first communist state.
-Economy was single-handedly controlled by the government.
-Farming, industry, and transportation were restricted.
-USSR became economic superpower under the leadership of Stalin.
-Exports were made in huge amounts to make money for the gov't's benefit, although the people were starving. -
The Great Depression
Major worldwide downturn of the economy. It was the longest-lasting, most severe, and most widespread economic depression of the 1900's. In North America, it was accompanied by years of drought.
-Demonstrates just how economically connected the world has become; originated in the US and spread around the globe.
-Created a vicious cycle thru cont'd deflation and reluctance to spend.
-Decline of personal income, tax revenue, profits, and prices internationally (international trade dropped 50%). -
World War II
Global war 1939-1945; the Allies vs. the Axis (world powers), overall involving more than 30 countries and thoroughly affecting their economies, identities, idustries, etc.
-WWII encouraged countries to begin spending financially, prompting the end of the Depression.
-Time and money were invested in national defense globally.
-Countries granted loans throughout the war to aid one another.
-Wartime manufacturing facilities created demand for labour (women)
-Demand for labour=high wages+benefits -
UN, World Bank, IMF formed
These 3 organizations were created and represented by countries across the world to encourage peace, trade, and good relations.
-International trade and communications were heavily influenced by these organizations.
-Peace and trade agreements helped trade alliances to thrive.
-Numerous trade barriers abolished.
-US currency held supremecy for years after. -
Cold War
Created through political/military tension between the then-USSR and the US. No large-scale fighting ever broke out.
-Ended USSR-US alliance against Germany; leaving 2 countires w/ radically different economic ideas.
-The US extended financial aid across Western Anti-Communist Europe to challenge USSR
-The US and the USSR both spent large sums of money researching, creating and building military weapons (which they'd never use...therefore, the money was "wasted" on the economy). -
European Free Trade Association formed
Today, a free trade agreement between Iceland, Liechtenstein, Norway, and Switzerland.
-Provides rules and guidelines for expansion of trade both amongst themselves and globally.
-Each member country is free to establish free trade agreements with any non-member country.
-Also able to establish individual customs duties against non-member countries.
-Stimulated remarkable increase of foreign trade volume amongst its members. -
Third World Debt Crisis begins
Started when 3rd World countries could not pay back the large sums of money they had been loaned by Western countries for development projects. They began to fall back in payments.
-3rd world countries involved in increasingly large debts to the WTO, the IMF, commercial banks, and 1st World governments .
-3rd world countries have begun to take on new debts to pay off existing debts.
-Some regions of Africa may pay more than $10 billion every year, more than they can spend on education/healthcare -
European Union formed
Economic/political union of 28 European member-states.
-Established single market through system of laws shared throughout EU.
-Ensures free movement of goods and services.
-Maintains policies on trade.
-Established the monetary union; 18 member states that use the euro as their currency.
-7.3% of world population contained in EU. -
North American Free Trade Agreement comes into force
Free trade agreement signed by Mexico, the US, and Canada.
-Eliminated trade and investment barriers.
-Eliminated majority of tariffs on exports.
-Protects intellectual property rights.
-However, trade of agricultural products was negotiated separately between the three countries and still remains controversial. -
Commencement of World Trade Organization
Replaced the General Agreement of Tariffs and Trade (GATT) on January 1, 1995.
-Deals with regulation of global trade.
-Supervises and liberizes international commerce.
-Rules for negotiating trade agreements.
-Furthered trade by peacefull negotiating financial and structural problems.
-Over 150 member countries. -
Global Financial Crisis
2008-2012 global recession resulting from the US "housing bubble" in which banks failed in financial regulations by allowing risky investments and excessive borrowing, leaving them declaring bankruptcy across the country.
-Through the decisions of American banks, the whole world eventually fell into a debt crisis; unemployment rose steeply, the market crashed, consumer wealth declined in trillions, and key businesses failed. -
Treaty of Versailles
Signed after WWI to "endure peace and prevent another global war". However, it was one of the factors that may have lead to WWII; imposing impossible reparations on Germany .
-Germany had steep financial trouble; they were in over their head trying to keep up on global payments yo world powers.
-Germany lost its money-making colonies to world powers.
