The contemporary world is characterized by the development of the global economy. Globalization has linked the economies of different countries, meaning they rely on each other due to the increased exchange of goods, services and labour. Despite this interdependence, not all nations have the same economic system. Just like political regimes, economic systems fall on the left-right spectrum. Each system has its own specific characteristics and objectives. People in different countries live differently depending on their country’s economic system. A free enterprise economy does not affect people the same way a command economy does. Depending on the economic system in place, the measures adopted to fight poverty or promote business development will differ. Economic indicators such as GDP or the unemployment rate can help provide an overview of a country’s economic situation.
Interdependence refers to the mutual reliance between people, companies or governments.
Globalization is a process that pushes governments to open their national economy to the world market to increase trade between countries, making them interdependent. Trade may include services, goods, capital or the movement of workers.
You can consult the following concept sheets to help you to understand the world today from an economic perspective: