Topic 1. International economic system

1. Sense and structure of the international economic system

2. Sense, structure and principles of international economic relations

3. Subjects and environment of international economic relations

1. Sense and structure of the international economic system

International economics is the sphere of economic relations which arise in the process of interaction between businesses of different nationalities on the production, exchange and consumption of goods, services and factors of production at an international level.

The structure of the international economic system is a combination of national economic systems in their interaction based on international division of labour with an appropriate mechanism of regulation.

The constituent elements of the international economic system are the national economic system, which is a collection of interrelated industries and sectors of economic activity of countries in organizational, technological and economic terms, which form the world markets and turn the production of goods and services into international economic activity by increasing their openness in interaction with each other. In addition, the international economic system involves regulatory mechanisms in national, international and supranational levels.

The scope of the international economic system is the global economy. This set of national economies in their interaction through the system of international economic relations. They express the relationship between the two countries in the economic field, covering cooperative relations and reproduction.

The basic trends in the character of the world economy at this stage are:

- Establishment of a global model of the world economy, based on post-industrial formation of society;

- Forming productive forces of planetary scale;

- Liberalization of foreign trade activities;

- Increasing interdependence of national economies;

- Transformation of the structure of the world economy by forming its new subsystems;

- Conversion of TNCs into the main subjects of international economic activity.

Considering the world economy as a whole system, it is necessary to define its structure and identify the components of the subsystem by the following criteria:

• level of economic development;

• social structure of the economy;

• type of economic growth;

• the degree of openness of national economies.

Based on these criteria to distinguish the following groups:

- Industrialized countries (40);

- Countries with economies in transition (28);

- Developing countries (140).

This division is based on the use of internationally accepted indicators:

- Gross domestic product (GDP) - expresses the total amount of final goods and services produced in the country, regardless of nationality working in its business in a certain period of time. This figure is for the whole world more than 47 trillion. dollars. of the average level of over 7 thousand dollars.

- Gross National Product (GNP) - expresses the output, which is controlled by corporations and individuals of nationality.

- Human Development Index (HDI) - integral index, which is calculated on the basis of data on living standards (real GDP per capita), life expectancy and educational level. With HDI value countries are ranked on a scale from 0 to 1:

• low (up to 0.50) - 34 countries;

• average (0,51-0,79) - 86 countries;

• high (0,80-1,00) - 55 countries.

Formation of the world economy is based on the process of internationalization of economic life, i.e., the process of emergence and development of connections between national economies, their convergence and interdependence of economic agents in different countries, which is an objective law of development of the productive forces of society. The consequence of the internationalization of production is the development of the international division of labour (IDL) as a higher degree of social division of labour between countries, which manifests itself in the specialization of individual countries in the production of certain products and finds its expression in these two forms as international specialization of production and international industrial cooperation.

Factors affecting the development and deepening of the international division of labour and determine international specialization of a country can be classified into the following groups:

• natural geographic;

• socio-economic;

• scientific and technological.

An important group of factors IDL is science and technology, which significantly affects the competitiveness and dramatically modifies the general civilizational model of international division of labour.