WHAT IS GLOBAL FINANCE?
WHAT IS GLOBAL FINANCE?
9
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0
7
2-5 million
years
8000
B.C.
7000
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B.C.
5000
B.C.
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B.C.
3000
B.C.
2000
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B.C.
1
A.D.
1000
A.D.
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A.D.
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Fig. 2.1
World Population Growth.
This extraordinary improvement has been achieved by advances
in scientific knowledge, farming equipment, and farming techniques,
none of which could have developed without the investment of money
and labor through successive generations.
Today, poorer countries face difficulties in achieving growth. Growth
comes in many ways, but the two most important drivers are techno-
logical advance and accumulating capital (in the sense of useful assets
such as roads, factories, and machinery). Both of these drivers require
investment, and poor countries have trouble in diverting resources
from producing essentials, such as food and clothing, into projects that
will create long-term growth.
TYPES OF ECONOMIC SYSTEM
In practice, most countries have a ``mixed'' economic system, where
there is both government involvement and a degree of freedom in the
