Economics assignment on: Globalization

Globalization refers to a concept which would help all the economies to integrate with the world economies. With the rise in globalization would help in order to reduce the tariff barriers which would help in order to provide a hassle free international trade amongst the various economies, reduce the export fees along with the import quotas (Stiglitz, 2007). The main goal for globalization would be to increase the wealth, goods, and services with the help of the division of the international labor. This would also help in order to increase the efficiency, build better industrial relations & cater to the world class competition (Nayar, 2006).Globalization refers to a process which would describe how the various economies, societies & the culture would integrate with the help of proper communication, transportation as well as fair trade practices (Stiglitz, 2007). When two economies are related to one another, it is known as Economic Globalization. Economic globalization refers to the integration of the national economy with an international economy through capita investment flows, foreign direct investment (FDI), trade, migration, upgraded technology, presence of the military (Nayar, 2006).

Most of the times, globalization has been referred to as a combination of social, economic, technological, political, socio cultural as well as biological factors. The term globalization has been regarded to share the ideas, languages as well as the various cultures through acculturation. The process through which the entire world accumulates under one head would be known as globalization. Apart from the appreciation, one of the major stresses of globalization would be to decrease the intercultural contacts with an increase in the conflict amongst international as well as intra national economies (Stiglitz, 2007).

Globalization is regarded as a complex phenomenon, which takes into consideration high levels of trends amongst the social, economic & cultural spheres. It refers to one of the multi dimensional character & had a unique definition attached to it (Victoria Capital Management Inc, 2007). In the simplest terms, globalization refers to an increased as well as an intensified flow of goods & services, capital, people, ideas along with information to be shared amongst the various nations all across the world. This would help in order to cross the borders & integrate amongst the economies on the basis of economic, social & cultural activities (Victoria Capital Management Inc, 2007). This helps in the creation of both opportunities & costs; therefore it should not be demonized or sanctified which might affect the world today. Globalization could be referred to as one of the variable which would help in order to measure the economic performance of the countries at large (Intriligator, 2003).

It must be seen that, there are four major driving forces which would help in order to increase the interdependence (Stiglitz, 2007). These factors are first driving force would be through proper trade as well as investment liberalization, secondly, use of upgraded technologies which would help in order to reduce the communication costs, thirdly, entrepreneurship &  in the end global social networks. Many researchers have made it clear that, majorly two driving forces i.e. use of the upgraded technology & entrepreneurship is behind globalization which would help in order to have upgraded integration amongst the economies (Stiglitz, 2007).

As stated above that, globalization refers to connect the national economies with the international economies with the various aspects such as economic, social, cultural, trade, transportation, etc. Globalization has a clear impact upon the culture, language, working environment, political system upon the overall growth of the economy along with the standard of living of the people working in the world (Stiglitz, 2007). There are certain opportunities as well as certain criticism of globalization. With the help of globalization it could be seen that, various poor economies have been supported. This has helped in order to improve the economic condition of the nation as well as raise the standard of living of the population in a particular economy. Globalization would have a direct impact over an economy’s culture, political system, environment, overall growth, etc.

Some of the opportunities which could be attained with the help of globalization would be as under. Firstly, free flow of trade could be practiced within the economies (national & international). With the freedom to trade abroad, people have got the opportunity to travel overseas easily & contribute towards the social benefit of the same. Secondly, globalization has also led to free flow of information amongst the economies with the help of various communication channels (Nayar, 2006). This helps all the economies to be in touch with one another in regards to the global aspect. Thirdly, the organizations along with the customers would be benefitted as they would be open to wide range of goods as well as services which would give them the opportunity to expand their business all across the world (Stiglitz, 2007). Many times back, people were focusing more upon their country to look for a job opportunity but with the integration of the local economies with the world economy, many international job opportunities have also opened for the population at large (Nayar, 2006).With the help of globalization, the economy would be able to increase the level of capital which has been invested in the developed countries could be invested in the developing countries. This would help in order to increase the living style of the developing nations & help these economies to stand at par with the developed ones (Victoria Capital Management Inc, 2007). There are certain environmental issues which would be attached with the developed nations & might harm the standard of living of the developing nations. Many countries would meet with each other & discuss regarding the various aspects such as climatic changes, cross boundary pollution, etc. With the advancements in the technology, the data would be able to flow within the various economies (Nayar, 2006). Different modes of communication which could be used in order to flow the information would be with the help of satellites, internet, telephones, emails, etc. This would portray a positive aspect of globalization over the various economies involved in the same (Intriligator, 2003).

With the help of globalization, a fair & a structured set of agreements, copyright laws, would be formulated which would help the economies to prosper in the years to come. With the help of globalization, the tourism industry would also be benefitted as more number of people would be migrated. By migrating to other country, the population would be able to share ideas, products & services, etc which would be beneficial to the industry as a whole. Hence, it could be seen that globalization has many opportunities or advantages which would help the economies to prosper in the years to come. In short, globalization would be able to increase the economic wealth as well as the growth of the economy (Victoria Capital Management Inc, 2007).

Apart from all the opportunities, it must be seen that there are various disadvantages or criticism attached to globalization. With the help of globalization, the developed countries would lose their skilled as well as non skilled labor as they would prefer to work with the developing nations  (Nayar, 2006). It must be seen that, the economic aspects of one country would affect the economic growth of the other nation. Though globalization has been considered as a process which would help the nations in order to be unified & support the productivity. Some of the major disadvantages of globalization which should not be overlooked would be unemployment, social degeneration as well as difficulty in order to deal with competition (Victoria Capital Management Inc, 2007).

The first major disadvantage of globalization would be to increase the productivity. Increase in productivity could be seen as an added advantage for a particular nation but in order to increase the productivity, more number of people would be required to produce high levels of output (Nayar, 2006). More number of people refers to more population which would give a negative impact to the developing nation. Secondly, globalization would cause the population of a particular nation to become poorer as compared to their current financial position. Thirdly, globalization would also increase the number of loafers on the roads. As more number of people would quite (Nayar, 2006) their job as they have to serve the developing nations hence, more & more unemployed people would be on the road. After the industrial revolution, many industries have structured various policies, plans, rules & regulations which made more number of people to be fired from the economy (Stiglitz, 2007). With the applicability of the fierce rules & regulations, people started leaving the organization & the productivity levels started to decline. Less manpower was there in a particular economy which also led to a rise in the levels of unemployment (Intriligator, 2003). As stated in one of the research papers, people found them to be unemployed suddenly as they were unable to compete with the machines which required produced more number of outputs as compared to a single worker working in a particular organization (Stiglitz, 2007).

The third criticism attached to globalization would be in regards to the cultural aspect involved amongst the various economies. Culture refers to one of the most important aspects for any given economy. It must be seen that, all those economies which are financially strong would over power or dominant the other economies. As the powerful economies have high amount of finance, they would be able to influence the culture of that particular nation. According to Stiglitz, 2007, with a rise in globalization more & more people have become totally ignorant regarding the social, cultural, ethical as well as moral aspect which describes the different types of groups. Hence, rise in globalization would damage the small cultural groups which would be present in a particular nation.

One of the final disadvantages of globalization would be the problem to deal with the high levels of competition applicable amongst the various nations. With the rise in the globalization, two nations would be able to trade with one another in the most hassle free manner. This has also led to create an environment which would deal with high levels of competition amongst the nations (Intriligator, 2003). Therefore, the business or the organization would require more challenging & rigorous atmosphere which would help in order to meet the competition of not only national but the international nation as well. A constant rise in the monopolistic companies would also effect the competition in the business environment (Stiglitz, 2007).

Hence, it could be concluded that social degeneration, unemployment, as well as difficulty amongst the competitive environment based upon globalization. Therefore, the huge population should be aware regarding the exploitation which might hamper the growth of a particular nation (Intriligator, 2003).

With an integration of the various economies, high levels of competition have been covered in the entire nation or an economy. Hence, we can say that globalization has helped in order to increase the inter dependence, interaction & integration amongst the corporate spread all over the world (Intriligator, 2003). With the rise in the globalized economy, the economic reforms would help in order to encourage a free trade. World wealth creation is at its peak & the level of competition has added an advantage over the low cost capital & labor in the world. Wealth creation has led to one of the obvious outcome in the various economies (Ekanayake, 2009).Globalization has led to elaborate their focus upon the global as well as the financial markets. Industrial globalization, financial globalization, political globalization & the informational globalization refers to the various aspects which should be kept in mind in case of the rise in globalization. Rise in the MNC’s, emergence of the financial market & have an access over the various borrowers all across the globe, spread of the political sphere which interests the regions & the various neighborhood countries, etc (Intriligator, 2003).

The components discussed above in the essay would positively affect the investment climate thereby showcasing the various growth opportunities available in an economy. Most importantly, globalization would also help in transcending politics which would be no longer capitalist in nature & low levels of by products such as democracy would not be done. American’s have a great challenge as they will not be able to survive over the powerful economic force & encourage the government in diverse political agendas (Ekanayake, 2009).

Globalization would not only involve benefits, but various types of cost would might also create certain problems. These would create high levels of conflicts at many levels such as national, regional & at the international levels as well (Ekanayake, 2009). One of the major problems which might arise would take into consideration as to who would be the potential beneficiaries of the same. Major equity problems regarding the distribution of the profits from the globalization amongst the various organizations, individuals, economies, nation & region. But, many of the rich portion has been going towards the most rich economies or nations which has led to the creation of rich countries & has converted to more rich nations. This has led to greater inequalities as well as leading potential conflicts nationally or internationally (Wilczk, 2008). It has also seen that, the incomes globally would be based upon poor nations which have led to an increase in the rate at which the rich nations have been increasing. The tiger nations or the economies of East Asia have been reportedly to be growing at an increased rate (Intriligator, 2003). Whereas the least developed nations such as Europe, Africa, Asia & Central America has been growing at a very less rate as compared to the high end nations. Hence, the tiger nations or the poor nations have been marginalized (Ekanayake, 2009).

This has led to the polarization of the incomes all across the globe. With the rapid growth amongst the various nations or economies the rich economies are becoming richer & the poor slipping them behind. The increased disparities between the nations have led to disaffection & conflicts amongst the various poor nations. These nations have to struggle a lot in order to be at par with the various high end nations. Distribution of income has become one of the major issues or challenge in globalization of the world economy (Bertucci & Alberti, 2005).

The second problem would be in regards to the stemming from globalization which refers to one of the major potential problems which might arise in the years to come. There is a possibility that, the local fluctuations in the economy might lead to high levels of crisis’s which might have an impact over all over the globe (Intriligator, 2003). As seen in case of the financial crisis in Asia which began from Thailand in the year 1997 had spread across Southeast Asian economies & went up to South Korea had led to an economic collapse in the year 1998. Such type of linkages & instabilities would have a great impact over the various interconnected economies. Recession or depression amongst the economies would lead to high levels of interdependencies which have realized with the help of the globalization process. This was known as the Great Depression as it happened due to the devaluation of the currency, reduction of tariffs, policies, reforms, etc. This led to an economic conflict to economic warfare & has also led to largest war amongst the human history (Bertucci & Alberti, 2005).The last type of problem which was attached with globalization was due to the national economies by shifting the various government entities including various powerful nations, global firms, international organizations etc. Hence, globalization would lead to disaffection among the electorate. The result could be extreme levels of nationalism along with xenophobia which would lead to political movements, potential conflicts, etc (Wilczk, 2008).

The last type of cost associated with globalization would be due to high wage industrialized economies. The low unemployment rates in case of many high wage nations would disapprove the low wage nations (Bertucci & Alberti, 2005). Use of the upgraded technology & various national policies refer to one of the most important factors in case of globalization. It is very important to appreciate the economic aspects of globalization. Various non economic aspects of globalization would involve great risk, potential cost, catastrophe, etc (Wilczk, 2008). Thus, it could be concluded by saying that globalization refers to one of the tools which would help in order to measure the economic performance for any nation or an economy.

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