Role of Globalization in Modern Economy - 5326 Words

THE ROLE OF GLOBALIZATION IN THE MODERN ECONOMY GLOBALIZATION DEFINED Over the past several decades, the economies of the world have become increasingly linked, through expanded international trade in services as well as primary and manufactured goods, through portfolio investments such as international loans and purchases of stock, and through direct foreign investment, especially on the part of large multinational corporations. At the same time, foreign aid has increased much less in real terms and has become dwarfed by the now much larger flows of both private capital, and remittances. These linkages have had a marked effect on the developing world. But developing countries are importing and exporting more from each other, as well as†¦show more content†¦By providing many types of interactions with people in other countries, globalization can potentially benefit poor countries directly and indirectly through cultural, social, scientific, and technological exchanges, as well as through conventional trade and finance. A faster diffusion of pr oductive ideas, such as a shorter time between innovation and adoption of new technologies around the world, might help developing countries catch up more quickly. In short, globalization makes it possible, at least in principle, for the less developed countries to more effectively absorb the knowledge that is one of the foundations of the wealth of developed countries. In addition, as Adam Smith wrote in 1776, â€Å"the division of labor is limited by the extent of the market.† The larger the market that can be sold to, the greater the gains from trade and the division of labor. Moreover, the greater is the incentive for innovation, because the potential return is much larger. The potential downside of globalization is also greater for poorer countries, if they become locked into a pattern of dependence, if dualism within developing countries sharpens, or if some of the poor are entirely bypassed by globalization. Critics have raised the legitimate worry that many people living in poverty could find it all the harder to break out of poverty traps without concerted public action—for example, if human capitalShow MoreRelatedEffects Of Globalization On Cities In Asia1278 Words   |  6 PagesThree Case Studies on the Effects of Globalization on Cities in Asia Today two massive trends can be seen in the development of the world: the process of rapid urbanization, and the process of globalization. The two seem to go hand in hand. The 40 largest mega-regions produce two-thirds of global economic output and 90 percent of global global innovation, while housing just 18 percent of the world’s population. For those reasons urbanization and globalization trends keep rising at a pace that theRead MoreGlobalization And Its Impact On The World s Population Essay964 Words   |  4 PagesWhile the origins of globalization stems from within the interpretation of the individual. For better or worse, we cannot deny the dramatic effect it has caused on a large percentage of the world’s population. In the United States, we tend to see a side of this phenomenon that serves to our favor. Most of the commodities you encounter in your everyday life, from the coffee in your cup to the freedom of worship, are all a result of the advantages brought forth by globalization. In contrast, the lackRead MoreGlobalization And Globalization1050 Words   |  5 PagesPAPER Topic Choice 18: â€Å"On balance, globalization expands rather than contracts opportunities for economic prosperity around the world.† Why do you agree or disagree with this statement? Please support your answer with appropriate examples. Globalization has impacted almost every part of the modern world; it can be characterized by economic, political, and cultural integration. Economic globalization refers to the increasing interdependence of world economies as a result of the growing scale ofRead MoreGlobalization Is The Buzzword Of Today1362 Words   |  6 PagesGlobalization is the buzzword of today. The economies of the world are being increasingly integrated. Mobile phones and Internet have brought people closer. The world is becoming a smaller place. Goods, which were once confined to western countries, are available across the globe. 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MoreoverRead MoreGlobalization And Cultural Change : Globalization930 Words   |  4 PagesGlobalization Cultural Change Globalization refers the movement toward globally similar social attitudes, linguistic, global trades, through increased connectedness among countries and individuals worldwide. This globalization allows citizens to discover and explore other cultures. As globalization occurs, local cultures need to take an active role. With actively engaged local cultures, globalization can be a win-win situation in both world and local cultures and can lead citizens throughout theRead MorePositive Effects Of Globalization1361 Words   |  6 Pages Economic globalization refers to the â€Å"increasing interdependence of world economies† (Shangquan, 2000), as a result of free movement of goods, services, technology, capital, and information between countries and across borders. It is one of the three main areas of globalization; economic globalization moves at an increasingly fast pace as movement across borders progresses. While economic globalization has had many benefits and positive effec ts on both developed and under developed countries, it