Annual Report 2011 - NTNU

2.4 GLOBAL ECONOMIC FLOWS, GOVERNANCE AND STABILITY
Rationale and Research Objectives
Over decades international trade has grown substantially more rapid than total world
production. Improved technological possibilities for trade and capital flows, and
reduced regulations on the movements of goods and capital between countries, have
made economies more open at the same time as they have become more
interdependent. Over the last 50 years there are some broad and important patterns
of world growth. The western world had rapid growth in the first decades after the
second world war. In recent decades Asia has been the growth winner. In 1960 per
capita income was about the same in Asia and Africa. However, from then on we see a
divergence – where Asia has grown and Africa has not. With current growth rates, half
of the world population doubles its income every 10 th year.
The fast growing countries have at least two important common characteristics: They
have plenty of cheap labor, but they have few natural resources. The result has been
high prices on natural resources, and low prices on manufactured goods. This shift in
relative prices has benefitted thos ecountreis that export natural resources and import
manufactured goods – in particular Norway. At the same time globablzation has gone
hand in hand with increased international macroeconomic imbalances. Most western
countries have expanded their public or foreign debt.
While on the other hand in particular China have had huge current account surpluses.
Today most people would agree that the current economic imbalances are not
sustanable, and many would also claim that they are a major cause of the recent
financial crisis.
The focus area aims to study how the recent developments of globalization (as
described above) affect the economies and politics of different countries by
addressing following three research questions.
Why does China save so much?
Why does natural resources breed success in some countries but failure in others?
How does globalization affect governance?
Main Activities 2011
In 2011, the focus area started its activities and prioritized network building with a priority
on international cooperation. The research area where also active in project initiation and
publication. Accordingly, the focus area allocated funds on scholars’ international travelling,
project initations and hiring a Professor II position (Professor Halvor Mehlum, Department
of Economics, University of Oslo). The focus area also had a workshop joint with focus area
Intercultural Dynamics, which attracted a number of leading international scholars.
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