In an innovative way, The International Environment of Business, focuses on the fundamental forces of globalization and their implications for both private management in and public management of the changing world economy. The author approaches the subject matter in a way that cuts across the traditional boundaries of business, economics, and international relations. The resulting integration provides the basis for an undertaking of international contextual analysis by managers for their practical tasks of diagnosing, predicting, and responding in their rapidly evolving international, economic, and political environment. The first five chapters establish -- in a substantial, yet concise manner -- some basic principles of international trade and finance. The emphasis is on dynamic comparative advantage, trade policy, international capital movements, and balance-of-payments policy in order to further an understanding of the conduct of international economic transactions and an evaluation of public policy. The analytical principles from these chapters are applied in a number of Policy Profiles that present real policy issues of contemporary and future importance in the world economy. A set of questions provides a basis for an extended discussion of each Policy Profile. For a more advance exposition of some analytical points, there are a number of statistical and technical appendices at the end of these chapters. The next four chapters examine problems that involve state/market relationships in a variety of countries and regions. A major structural change in the global economy is the new Europe -- the internal market integration of the European Union and the proposed movement to an Economic and Monetary Union. Also far reaching are the changes in Japan's global position, the question of "Japanomics, " and Japan's transition to a new era. The newly industrialized countries (NICs) are also important actors in the global economy. But can the successful strategies of the Asian NICs be generalized to other developing countries? Also raising crucial questions about the future are the transition economies of Central and Eastern Europe, the former Soviet Union, and China. What is their potential and what is the likelihood of free markets taking hold? In the final two chapters, the author summarizes managerial problems that arise when the forces of international economic integration conflict with national political autonomy, and synthesizes the overriding themes of global competition and global governance.