Empires and the Silk Road
Starting in the 500s BC, governments started to come together into empires. Travel got safer. Traders could travel long distances without running into wars. The Sogdians in Central Asia (Afghanistan and Uzbekistan) began to sell horses to the Persian Empire to their west. And they sold horses to the Chinese emperors to their east, and south into India. This was the beginning of the Silk Road.
Sogdians and China
Soon the Sogdians added other things to sell. They sold cattle, and they sold peaches and knotted woolen carpets. Under the Han Dynasty, as China developed a strong empire, Chinese people began to sell more silk and pottery to the Sogdians, who sold it again to their west. Silk began to travel all the way across Asia, as far as the new Roman Empire. In return, the Romans traded gold, furs, wool cloth, and glass cups and bowls east to the Sogdians, and some of it even reached China.
India and Rome
As East-West trade along the Silk Road became more important, people began to look for other routes. The Ptolemies in Egypt figured out how to use ocean currents to sail to India and back. The Romans, who were often fighting with the Parthian Empire to their east, used this route through Egypt and Arabia to India. Chinese traders also found ways to sail from China to India, avoiding the Sogdians. India became an important place for trade, as much as Afghanistan.
Vikings and Russia
About 500 AD, the Sogdians and their neighbors in Central Asia figured out new things to trade – even more valuable and tradable than horses and cattle. They began to make steel, and to produce sugar. The fall of the western part of the Roman Empire in the 400s AD left much of Europe too poor to do much trading. Further north, though, the Vikings figured out a new route through Russia to the Sogdians, and eagerly traded furs and amber for the good Central Asian steel. To the south, the Islamic Empire continued trading through Mecca to India.
When the Arabs conquered North Africa in the 600s AD, they expanded trade south across the Sahara and all along the coast of East Africa too, so that most people in Africa could also buy steel, sugar, cotton cloth from India, and silk from China.
Still, even at the very end of the Middle Ages, the great majority of people in Europe and Asia still lived on small farms and in small villages, out in the country, and got most of their food by growing or herding it themselves, and the rest of their food from hunting, fishing, or gathering wild fruits and plants.
Bibliography and further reading about the medieval economy:
Eyewitness: Money, by Joe Cribb (2000). Not the best in the series, but still a good introduction to exchange systems for kids.
The Roman Empire: Economy, Society and Culture, by Peter Garnsey and Richard Saller (1987). Two experts, but their writing is easy enough for high schoolers.
Rural Economy and Country Life in the Medieval West, by Georges Duby (reprinted 1998). Translated from French. A path-breaking account of what it was like to be a medieval peasant, though it can be hard to read.