Global Economic Interdependence: The Impact of Political Economy-Reflection

Introduction:

Dicken & Edgington (2015), in The Centre of Gravity Shifts: Transforming the Geographies of The Global Economy, covers the concept of “Growing interconnectedness within the global economy” (pg.17). The growing interconnection between the economies refers to the flow of goods, information and technology, financial products, and employment opportunities across borders. In economy it refers to the interdependence of countries across the globe due to free trade. This interconnection between the economies of the various countries plays a significant role in the economic growth, increasing income levels, reduction of poverty etc. It is dependent on the factors such as trade growth being faster than the output, foreign direct investment growth being faster than trade and the emergence of structural imbalance in the world economy.

The growing interconnectedness of the world economy due to globalization bring major implications on political economy. Political Economy is a branch of social sciences that deals with the relationships among individuals, governments, its policies and how they all affect the economy of the nations (Bishop & Payne, 2021). This interconnection across the national border brings broader economic integration. The analysis of this concept in context of the political economy is based on how power dynamics, political institutions and global policymaking structures impact and are impacted by the economic integration.