Windows on the World Economy with Economic Applications

Reinert explains the current workings of the global economy. Explaining the basic precepts of international trade. Within the context of the postwar trade agreements. The rise of the newly industrialising countries of East Asia (Japan, South Korea and Taiwan) is keyed to the massive amounts of export-driven manufactured goods that those countries produced. Related to this are ideas like the enabling of foreign direct investment, which can act as a capital supplier and a spur to future growth of a country that gets the investment. The book also delves into economic theory and accounting frameworks needed to quantify international trade. Given the global scope of the book, currencies and exchange rates between those currencies are discussed. Hence the idea of purchasing power parity, as a different way to compare countries, instead of purely by exchange rates. The Big Mac index, introduced by the Economist magazine, is given as a vivid instantiator of PPP.