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Introduction Case Establishing a Global Outlook—Susan's Story1

Chapter One Contemporary World Economy and Its Development3

1.1 Fundamental Elements of the Contemporary World Economy4

1.2 Historical Review of the World Economy11

Chapter Summary16

Questions and Problems17

Online Study17

Case Study：The Nationalities of the Top 25 Multinational Corporations and Industrial Sectors18

Chapter Two Catalysts of World Economic Development21

2.1 International Division of Labor21

2.2 Technology Innovations and Diffusion26

2.3 Function of the World Market30

2.4 Measurement of Economic Development35

Chapter Summary42

Questions and Problems43

Online Study44

Case Study：Yao Ming—"The Next Big Thing"for International Services44

Chapter Three Globalization Era49

3.1 Definition and Measurements50

3.2 Advantages and Disadvantages of Globalization56

3.3 Effects of Globalization on Corporation's Development61

3.4 Drivers of Corporate Internationalization and Globalization66

Chapter Summary71

Questions and Problems72

Online Study73

Case Study：The Battle in Seattle and the Anti-Globalization Movement73

Chapter Four Regional Economic Integration76

4.1 Economic Integration and Economic Blocs76

4.2 Basic Theory of Economic Integration81

4.3 European Integration85

4.4 North American Economic Integration97

4.5 Other Economic Alliances100

Chapter Summary106

Questions and Problems108

Online Study108

Case Study：Is European Union an Optimal Currency Area?108

Chapter Five Freedom of Trade—Forerunner of Economic Globalization111

5.1 Trade Expansion and Openness of Trading Countries111

5.2 GATT/WTO Efforts in Promoting Freedom of the World Trade117

5.3 Free Trade vs.Protectionism Debate122

Chapter Summary129

Questions and Problems130

Online Study130

Case Study：Free Trade for Steel?The Debate Continues130

Chapter Six Financial Globalization133

6.1 Definition，Driving Forces and Measurement134

6.2 The International Capital Flows135

6.3 Benefits of Financial Globalization140

6.4 Risks of Financial Globalization143

6.5 Multilateral Structure and Policymaking149

Chapter Summary159

Questions and Problems161

Online Study161

Case Study：Is Capital-Market Liberalization the Right Policy?161

Chapter Seven Challenges to the Sustainable Development of the World Economy164

7.1 Unbalanced Economic Development164

7.2 World Population Challenge170

7.3 Environmental Challenges and Economic Development180

7.4 Pandemic Diseases187

Chapter Summary190

Questions and Problems191

Online Study192

Case Study：Global Climate Change and the Kyoto Protocol192

Chapter Eight International Collaboration and Coordination195

8.1 Correcting International Externalities via Multilateral Interventions196

8.2 Protecting the Global Environment Through Multinational Efforts199

8.3 International Policy Coordination204

Chapter Summary212

Questions and Problems212

Online Study213

Case Study：A French Judge Combats an International Externality213

Chapter Nine Countries in the Globalized World Economy216

9.1 The Division of Country Groups217

9.2 Developed Countries and Their Economic Performance220

9.3 Developing Countries'Economic Development Strategies in the Globalization Era230

9.4 Economies in Transition238

Chapter Summary252

Questions and Problems253

Online Study260

Case Study：Lessons from Economic Transition in Russia and China261

Chapter Ten China's Economic Reform and Its Integration into the World Economy268

10.1 Development Strategy Before China's Economic Reform269

10.2 China's Economic Reform and Integration into the World Economy273

10.3 China's Economic Achievement and Its Development Strategy284

Chapter Summary292

Questions and Problems293

Online Study293

Case Study：An Example of Application of Comparative Advantage Strategy—Taiwan's Economic Development293