ABSTRACT
The exchange of goods and services is the means through which independent economic units enter into economic relations with one another and become part of a local or national economic community. As exchange passes beyond a country’s boundaries, national economic systems become parts of a broader regional, continental or world economy. Flows of commodity trade are not the only economic links forged between nations, however. People are also highly mobile, and the long evolution of trade from primitive barter to our modern worldwide network of commodity exchange has made necessary an intricate system of international credits, loans and investments. It is these flows of trade, labour and capital that constitute the vital processes of the international economy. Obviously, therefore, any study of the growth of the international economy must be concerned with the measurement and comparison of the rate at which these processes go on over time. It must also be concerned with examining the ways in which the international economic system is organized to carry out these vital processes, and how the structure, organization and functioning of these processes change as the international economy expands. In the final analysis, however, the international economy is studied not as an end in itself, but rather as a means to an end, for in studying its expansion in recent times, we are analysing one of the most potent causes of modern economic growth.
