Let me share with you one final topic regarding demography. And it refers also to the growth of cities, which is the topic of global cities. Global cities are cities whose importance and identity has become much larger than that of the country in which they are situated. So for example, New York has a dynamic to its own that goes well beyond the fact that it is an American city. It's a global city, so is London, so is Hong Kong perhaps. According to sociology Saskia Sassen, global cities are the place where the work of globalization gets done. That is to say increasingly what we see in the world is that the global economy, global politics, global society, is something that takes place at global cities. Now, think about what are the most important dimensions of global cities? There's an economic dimension to it, there's a financial dimension, a political dimension, but also a cultural dimension. And of course, most global cities tend to be very diverse. That is to say they reflect global society and global trends more than they reflect aspects of the home country in which they happen to be situated. Global cities tend to be relatively large. They tend to be influential and very prominent. They're culturally and ethnically diverse as I've just mentioned. They're also culturally thriving. They have lots of museums. They offer lots of musical performances. They are home to important universities, schools and other kinds of organizations. They have advanced infrastructure. They're rich in businesses services. They tend to be open, friendly and safe, and they're legally and politically secure. Why do we have global cities in the world? Well, we have them for a number of reasons. One very important reason is the so-called agglomeration economies. So, in certain industries, everybody wants to be in New York or in London. Let's say, financial services. Or, perhaps, fashion with Paris. Why? Well, because everybody benefits from putting in the same place a lot of people who specialize in the same type of activity. Also, we see the rise of global cities because of the growth in specialized service companies, like consulting firms, or banks, and so on. Also because it is easier to coordinate dispersed activities if everybody is in the same location, and this is in spite of all of the advances that we've seen in telecommunications. In fact, the growth in telecommunications technologies, has I think, increased the importance of global cities, because it is easier now to manage or to coordinate activities located in very, very distant parts of the world from one central location. Now, if you take a look at the largest cities in the world in terms of the size of their GDP, their gross domestic product, which as you know measures the size of the economy, we see some very, very striking numbers here. So, Tokyo is the city in the world with the largest GDP, gross domestic product, with about $1.5 billion. Well, that's the same size as the entire Australian economy, as you can see on the table. New York City is the second largest urban economy in the world. And it's about the same size of Mexico, the entire country. Los Angeles is the third largest, and as you can see, is about the same size as the entire country of Turkey in terms of the economic importance. And you can go down the table and compare big cities in the world to certain economies and you can really see the extent to which the global economy has become dominated by large global cities. Now, I would argue there are three different types of global cities. They are the truly global hubs for business and for politics and for diplomacy. And I would perhaps only put in that category London and New York, both very diverse cities as well. Then we have regional hubs, cities that are global but they only serve perhaps a particular region or part of the world, and under this category I would mention Singapore, Panama, Miami, or Dubai. And then lastly, we have a third category of global cities, and those are the so called gateways. They provide access to a particular part of the world. For example Hong Kong when it comes to doing business with in Greater China. Or Sydney when it comes to accessing all of the great natural resources of Australia. Now, I would like to end this first week of class by asking you a question. As you know, cities around the world always compete, for attracting all sorts of resources, like talented people or investments. But they also compete for instance, to organize important events, such as the Olympic Games. And they do so knowing that, it is often the case, that the benefits from organizing the Olympic Games are smaller than the costs of doing so. Well, the potential benefits of organizing the Olympic Games I think are sometimes difficult to measure. Some of them have impact in short run. When you organize the Games for example, you see that hotels have more customers or restaurants. Others are to be felt those effects in the longer run. For example, effects that the infrastructure may have on economic activity. Some of the effects could be tangible and measurable. Others could be more intangible, for example, the reputation of a city grows after having organized the Olympic Games. Some of the effects may be direct, whereas others could be more indirect or induced. For example, when it comes to investment or jobs, tourism, infrastructure for future use, or the amount of tax revenue that the government can collect as a result of organizing the Olympics. The renovation or the regeneration of certain parts of the city that were in disrepair, but before you organize the Olympics, you rebuild or you refurbish. And then as I mentioned earlier, lastly the reputation. So think about the following. It's also important to keep in mind, who pays for the event? So, the city is hosting the Olympics, but is the city by itself paying for all of the expenses, or is the entire country in which that city is located paying for the event? Is there any crowding out? That is to say you bring in a lot of tourists, let's say to London or to Beijing or to Rio for the Olympics. But that essentially means that the sports fans are coming into town. But other people who would normally go to London or Rio or Beijing without the Olympics feel that they don't want to go because everything is going to be more expensive or there's going to be overcrowding. Are they truly transformational? That's another question that I want you to consider. Do they transform the fabric of the city? Is there a before and an after organizing the Olympic Games? And then lastly, does bidding for the Olympics bring most of the benefits, for example, in terms of visibility, and that it's not necessary for the city to actually host the event? Well, let me give you the list of the cities in the world since the mid 1970s that have hosted the Summer Olympic games. Starts with Montreal and ends with Rio in the year 2016. And the question for you is, which of these cities do you think after having organized or hosted the Summer Olympic Games has seen more benefits than costs? Think about it. You see, when you examine the reports and the analyses that have been undertaken to measure the benefits and the costs of the Summer Olympics. Most of those analyses, what they do is they conclude that there's only one city out of the ones that you see on the screen right now, which is 11 cities, for which it was a clear benefit, net of costs to organize the Olympics. That city happens to be Barcelona. So, the Olympic Games in Barcelona in the year 1992 were truly transformational to the city. Barcelona was a city that was not very well known outside of Spain or outside of Europe up until that point. It really became a very visible and very famous city. The number of tourists has increased ten times when you compare the situation today to the period before the Olympic Games. So in other words, the long term economic and reputational benefits to the city have been enormous. >> This is the Olympic Stadium in Barcelona. Barcelona organized the 1992 Olympic Games. These were arguably the most successful Olympic Games, Summer Olympic Games, in history. The Games helped rebuild the Barcelona brand, turning it into a tourist-. >> Let's examine some of the other examples here, Montreal. These residents of Montreal in Canada, that it is still paying today, 30 years later, government bonds, right, that were issued to pay for the Olympics. Today, most residents of the city regret that they organized the Games. Moscow and LA, the next two games, were also problematic. Because if you remember, the Soviet Union invaded Afghanistan in the year 1979. So the 1980 Games were boycotted by the US and its allies. And then the LA Games were boycotted by the Soviet Union and its allies. The Seoul Games came close to being beneficial to the country. They certainly made headlines around the world and enabled South Korea to show the entire world how much it had developed, to what extent it had become an advanced economy. The Games in Atlanta were a money losing proposition, and it if you remember, they were also tainted by an act of terrorism. The Games in Sydney, Australia came close to breaking even but didn't quite reach that level. Those in Athens will be remembered in Olympic history as a big mistake. In Beijing, certainly, in the year 2008, helped China show the world how much progress it had made as a country, as an economy. And the Games in London were reasonably good. Those in Rio that took place in the year 2016, I think will also be remembered as Games that imposed many costs on the residents of the city. Without really solving really some of the huge problems that Rio de Janeiro has in terms of infrastructure, in terms of safety, and in terms of the lack of jobs for its residents. So, we've come to the end of the first week of class. Remember that we will be analyzing in future weeks of class how other parts of the world are changing and will likely change over the next few decades. But I wanted to expose you during this first week of class to demographic trends, to changes in population. Because you will see later on that every single market in the world, whether it is a consumer market or a financial market, you will see that every political system in the world, and you will see that even culture and society as a whole depends on demographic trends. Changes in population dynamics have very important implications for consumer markets, for financial markets, for politics, for geopolitics, and for society as a whole. And we will be analyzing those trends in the next few weeks of class.