Economic Essay – Globalization
“Analyze the impact of globalization on economic growth, quality of life, and external stability of global economies”
Globalization, an important characteristic within the contemporary economic environment, has resulted in significant changes to individual nations in terms of economic development strategies undertaken by national governments. The term globalization refers to the integration of local and international economies into a globally unified political economic and cultural order, and is not a singular phenomenon, but a term to describe the forces that transform an economy into one characterized by the embracement of the freer movement of trade, investment, labor and capital. The drive for globalization has resulted in greater economic growth globally, through the opening up of barriers to international trade, yet this increase in world output is often associated with detrimental effects in relation to the stability of a national economy, being susceptible to the ups and downs of the international business cycle and also both positive and negative effects on the standards of living or quality of life with in a nation.
It is often difficult to categories an economy as being globalized, yet there are several key indicator that suggest economic management decisions undertaken by the govt have come as a result of globalization. The main evidence to suggest the globalization of nations has been the growth in global markets, changes in global consumption patterns, the establishment of intergovernmental agreements as well as the rise of transnational corporations. Globalization has been essentially driven by the breaking down of economic barriers between nations over recent decades that have resulted in greater worldwide economic growth. This economic liberalization has been spurred on by the global trend towards the deregulation of national economies as well as reforms to encourage greater competitiveness with in the global markets. As a result of the microeconomic reforms, globally there has been a general reduction of restrictions on trade, capital flows and foreign investments. In addition to this, technological advancements over the last half century have contributed to this “economic liberalization” where as a result of this technology growth, transport costs have reduced dramatically, making trade more cost efficient. Communication costs have also reduced through advancements in telecommunications and e-commerce resulting in escalated movements in international finance. Through these increases in trade and financial flows, countries have experienced increased level of economic growth over time that has contributed to the world standards of living. The global population...