I have the following impacts but do i use these:
Analyse the impact of globalisation on the Global economy.
Globalisation is the increased integration between different countries and their economies and the increased international influence on all aspects of life and economic activity. The globalisation process has affected countries in different ways. This can be seen clearly in regards to economic growth and development, trade, investment, and international corporations, the role of financial markets and environmental consequences.
The globalisation process has increased rapidly because of the increased breakdown in protection i.e. Reduction in tariffs, subsidies, import quotas etc.
Trade
-Trade in goods and services has grown rapidly in recent years from $US5.5 trillion in 1990 to $US 16 trillion in 2002.
-An important development that has contributed to these trade flows is the increased influence of transnational corporations on world trade. TNC’s such as Microsoft play a key role in the global economy
-Technology also plays an important role in the expansion of trade and investment within nations. For those countries that export vast amount of goods, developments in technology have reduced the cost of production, which in turn the cost of the good is cheaper making the X more competitive in the global market.
- Major Criticism of TNC’s is that they do not operate under the laws of one gov’t and so can move their production facilities to countries with the lowest regulation.
Financial Markets
-The globalisation of financial markets has seen an increased reliance on foreign sources of finance for investment. Foreign direct investment is playing a greater role in creating the economic activity for every region around the world.
-Benefits from the flows from FDI have only benefited developed countries. Around three quarters of total FDI inflows were received by high income countries in 2002. Those FDI flows that got to developing nations mainly go to a small group for example East Asia.
-Short term financial flows also heavily favour the more prosperous emerging markets of the developing world which offer better financial returns. However, these countries have also experienced the greatest economic volatility in the past decade for example the financial crises of East Asia in the late 1990’s.
-Globalisation has also seen the establishment of the IMF. The role of the IMF is financial and exchange rate stability within economies. However over the last few years the IMF has been scrutinised. The major criticism of the IMF was its structural adjustment policies which benefited the higher income countries.
Economic Growth and Development
-Higher economic growth has been experienced by high income and newly industrialised economies as a result of increased investment.
-While Globalisation might be expected to produce great similarity in the growth levels of economies the process has actually led to increased divergence.
-While world economic growth has fallen in recent years it is nevertheless important to remember that increased economic integration should improve the performances of individual economies as they specialise in their most efficient areas of production.
Increased Inequality
-The onset of globalisation has been associated with a widening of the gap between wealthier and poorer countries of the world. Etc
Environmental consequences
-Globalisation offers the best opportunity to protect the world’s environment from harm by forcing individual nations to face their global responsibility for environmental preservation. It also allows for the cost of preservation to be shared.
-Globalisation can also have a negative impact on the environment. Low income countries that are desperate to earn foreign exchange can engage in economic behaviour with devesting environmental consequences in order to make export revenue. I.e. deforestation
-Faster levels of economic growth will contribute to increased pollution, depletion of non renewable energy sources and other environmental harm. Greenhouse gas emissions are highest in high income economies where per capita carbon dioxide emissions grew from 11.8 to 12.4 tonnes between 1990 and 2000
The international Business Cycle
-The closer linkages between economies hold benefits and risks for countries in the global economy.
-Benefit: faster rates of economic growth by specialisation in areas of production
-More exposed to downturns in the international BC
Government economic policies
These are from my notes from school. Do i talk more about the reduction in protection barriers or the est of the WTO, IMF or World Bank. Me very confused.
Tahnks heaps.
