KOKUSAI KEIZAI

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The global recession has clouded the world economy since the end of the long expansion in the US.Although the Fed and the IMF has expected the moderate recession, structural change in the global economy has produced new disequilibria which amplify cyclical fluctuations.Firstly, liberalized international capital movement is capable of destabilizing international capital and money markets. Secondly, financial deregulation coupled with monetarist's macro economic policy extremely expands balance sheets in firms, banks and households based on the bubble of both stock and house prices.Thirdly, “New Economy”brings decrease of employment in manufacturing industries and also divergence among incomes despite of increasing productivity. These disequilibria corresponding to structural change in the globalization assign a task of innovating in business cycle theories to contemporary economists.Both Keynesian and monetarist's prescriptions are not work well in the global economy.

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Globalization supplies the world economy with ample possibilities of both investing in high yield financial assets and borrowing abroad for investing in domestic projects. But under globlization free capital mobility affects the macro-economic policies of all countries and also global flow of funds tends to be affected by macro-economic policies of major countries.This means that under globalization we need more close macro-economic policy coordination.
The most serious problem under globalization is the fact that the U.S.the key country have had large current account deficits for more than twenty years, “automatically” financed by large capital inflow.These features are the result of present “dollar standard system”and we need to re-examine the possibility of international monetary reform.The introduction of the euro is expected to pormote such a movement.

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This paper summarizes what the existing studies in international and development economics tell us about the nexus between globalization and poverty.Several regularities emerge from our survey of the literature.First, the real sector globalization, which can be captured by enhanced openness in goods and service sectors, will reduce poverty through macroeconomic growth. This conclusion is also consistent with the recent cross-country findings on“pro-poor growth.”Second, while the improved accessibility to the international capital market, which is indication of the financial globalization, will also reduce poverty through economic growth, the variance of growth may increase as well.Particularly, the recent episodes of currency crises suggest that capital account liberalization magnify the welfare cost of“bad-state” realization.

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This study develops a multi-country model of trade that captures the role of country-specific communications networks interconnectivity, which enhances trade in intermediate business services.The number of countries connected to internationally interconnected networks is found to determine the structure of comparative advantage.That is, countries with interconnected networks have a comparative advantage in the goods that require business services provided via networks.In connected countries, producers of that goods benefit from the efficient transmission of business services.This research also demonstrates that countries whose country-specific networks are not connected to the interconnected networks may become worse off as the result of trade.

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