Globalization in Economics and its Consequences

Globalization in Economics and its Consequences

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Abstract

This paper seeks to give an analysis on globalization. Globalization plays an essential role in every economy, and its impact needs to be known. Employment has been created as a result of liberalization of trade in many economies. Unfortunately, the Gross Domestic Product of some countries has been affected negatively, in terms of per capita. It also plays a positive role in that, it reduces inequality and poverty. Policies, which focus on human development, growth and the societal standards, need to be implemented (Galbraith& Kum, 2002).

Consequences of Economic Globalization

To achieve economic development in the future, globalization of an economic nature has to occur. This is because the results are fulfilling as well as rewarding, due to its positive forces. In turn, the economy benefits through growing, living standards are improved, as well as resources being allocated fairly. Also, it seeks to ensure that enhancements of greater productivity take place. Those against economic globalization believe that it has led to income distribution reducing and poverty has increased to great levels (Galbraith& Kum, 2002). There is a need to ensure that economies are integrated .This can occur if investments are liberalized, through the existing economy, which is global. In order to promote growth of the economy, trade regimes have to exist.

Through change in an economy, development occurs. This is because development occurs at high stages from where it initially began, at the lower stage. This process is continuous and dynamic. It ensures that countries undergo social and economic transformation. Many societies seek to ensure that their values, social and economic, objectives are met through development. All activities done in societies are based upon the development concept. Development seeks to eradicate unemployment, inequality and poverty (Greenway& Morgan & Wright, 2002) .Basic needs provisions and reduction of poverty is the result of development. The ideal, which exists concerning globalization, is that everything in an economy needs to be fair .There is a need for technology and capital to freely flow, efficient working of markets and knowledge being easily accessible to people. Also, every person should have the right to make sure that the information they have benefits them

Reduced costs of transportations and use of technology have brought about economic globalization. Many governments are seeing the importance of an economy being integrated, as they will benefit in the long run. There are many dimensions of globalization of an economy. This is because restrictions on trade are brought about, and it involves aspects such as quotas, also, tariffs. When this takes places, labour is able to move freely and capital markets become liberalized (Greenway& Morgan & Wright, 2002). Imports are normally controlled through controls, which are quantitative as well as curtailed. Foreign Direct Investment restrictions are eliminated and tariff rates reduced. As a result of globalization, poverty is reduced and productivity as well as growth is promoted. The best example of a where globalization has had a positive impact is in East Asia. Research has found out that the latter, was able to increase the income per capita, which benefited many of the citizens, living in the various countries (Barro, 2000).

Conclusion

In conclusion, globalization has a lot of benefits for an economy. This means that countries should take advantage to ensure that problems such as unemployment, inequality and employment, do not exist. Polices, which enhance globalization, should be implemented, so that everyone benefits. Other factors, which influence globalization in an economy, are political stability, market structure, policies on domestic macroeconomic, among others.

References

Barro, R. (2000). Inequality and Growth in a Panel of Countries. Journal of Economic Growth 5, 1, 87-120.

Galbraith, J. & Kum, H. (2002). Inequality and Economic Growth. UTIP Working Paper No. 21. Austin: University of Texas.

Greenway, D. & Morgan, W. & Wright, P. (2002), “Trade Liberalization and Growth in

Developing Countries”, Journal of Development Economics, 67, 229-244.