Globalization is the word that means growing interdependence of the world’s economies, the culture of various economies, and the population of several; economies. In simple words, globalization means to remove the cross border barriers in terms of goods and services, in terms of people and services, in terms of technologies, flows of investment and money, and information and data. Many countries made a partnership with other countries to make these flows and movements easy for many centuries. Globalization is very helpful for our economy. Globalization is known to all economies for centuries but it gained popularity after the cold war of the 1990s. The globalization helps in shaping the cooperative world. The effects of globalization are complicated and very political. Globalization comes into effect for the benefits of society. It helps in alleviating many problems of the economy.
Positive and negative effects of globalization
There are various economic benefits of globalization and drawbacks of the globalization that is mentioned below:
- It helps in encouraging the producers and consumers for the benefit of the division of labor and the benefit of growing the economies.
- It helps in reducing the monopoly in the competitive market and helps in organizations and businesses to help decreasing innovations.
- It helps in improving the growth of per capita income and it helped many of the poorest countries to get economic growth faster. It also helps in reducing poverty.
- It helps in increasing the labor movement across the globe. For instance, one country can hire the people of another country in order to maximize their benefit and the first country will get a high employment rate and second got cheap labor from the first country. So both countries are helping each other because of globalization.
- It helps in gaining the ideas, information, skills, and knowledge from another country. For instance, if one country is looking for the scientist and the other country has good scientists then the other country can send their scientists to the first country just to help them. This helps in increasing the knowledge and skills from one country to another country. These barriers are removed because of globalization.
- Globalization helps in borrowing money from developed countries to developing countries. For instance, if any developing country is making any project and needs some funds to complete this project then this developing country can ask for the funds from the developed country.
- It helps in increasing awareness among consumers of challenges from wealth and income inequality. It helps to maintain equality in all economies. So that one country does not think that it is superior from the other.
- The globalization helps the country to maintain good governance better labor protections. It imposes competitive pressure on the economies to make good laws and rules in the economy.
Here is a list of the negative effects of globalization.
Globalization is the main reason for inequality in terms of wealth and income. There is various evidence for inequalities. The first and foremost evidence is the increasing gap between the rural and urban divide in economies such as India, China, and Brazil. This is the reason that arises political tensions and financial instability within the economy and confined the growth of the economy. The world has many poorest countries that can afford the basic technologies also.
If one economy is attached to various other economies then it increases the demand for food and other commodities. This is the reason for inflation. If the demand for anything increases then its price also increases. This inflation placed millions of people in the world at great risk.
The jobs and investment in advanced countries will lead to a drain of the developing country. In developed countries, people get attracted to a high package job and a good standard of life. This is the reason why developing country’s people go to advanced economies for good opportunities and it is loose to the developing country because all the brains turned into the drain for these economies. This will lead to a higher level of structural unemployment.
Global trade has grown because of globalization but it creates too many imbalances to win the trade between the economies. Some countries have been running some big businesses and getting some extra surpluses. These big surpluses generate great tension and it also pressurizes the economies to introduce protectionists’ policy in the economy. Protectionist policies can be anything like imports of control. Most of the developed economies introduce some policies so that no developing country can import their material to the economy and these developing economy fall into trap of a developed country.
Globalization has many threats and benefits as well.
Economic benefits of globalization
There are various benefits of globalization. Some economists think that it produces a positive outlook regarding the positive effects on the economic growth of globalization. There are several trades used in the economy such as capital flows, GDP, PCI, FDI and many more. If globalization is better in an economy then the GDP of the country also grows. If GDO grows then the country’s economy also grows. It helps the economy to alleviate social causes like poverty, ill-health conditions and many more. If any country can reduce these effects then it is sure that the country is growing positively.FDI is a foreign direct investment. FDI tends to increase at a much higher rate. It helps in boosting the latest technology and its transfer from one country to another.
Globalization also helps in increasing competition. This competition tends to stimulate new and latest technologies. These latest technologies help in the growth of FDI and this also helps in enhancing the economic output by make the process more effective and efficient. Globalization also enhances the economies of scale. This scale helps in decreasing the cost and prices. These costs and prices also help in supporting the economy further. This is a great source of globalization and encourages many economies to grow. Globalization also helped in raising the household income.
Globalization helps in removing the cross border tariffs. This also encourages people to move freely from one country to another. Although globalization has negative effects also, it has some economy growing factors also. Globalization is a boon to many businesses or organizations. The new opportunities that we are getting from the globalization help us to increase economic freedom. It also helps in supporting and winning the past decades. The above article provides you the insights about globalization and if you don’t get insights about globalization then you can take assistance from cheap assignment writers. These writers can provide you the details and information on all topics.
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