Economics of Globalization

Topics: Developed country, Developing country, Economics Pages: 7 (2236 words) Published: November 11, 2014
Economics Of Globalization
Muhammad Ibrahim (拉辛) 190963152
Globalization refers to the increasingly
global relationships of culture, people,
and economic activities. It is generally
used to refer to economic globalization.
In this research report I am going to
focus on effects of globalization on the
economy.

At the same time nonindustrialized
countries were rich in raw materials
but they needed to convert the raw
materials to a finished product which
was difficult for them to do so. These
needs of people led them towards
globalization which had solutions for
these problems.

Economic Globalization

The
Advantage
of
Economic
Globalization
on
the
world
economy

“The
global
distribution
of
the
production of goods and services,
through
reduction
of
barriers
to
international trade such as tariffs,
export fees, and import quotas and the
reduction
of
restrictions
on
the
movement
of
capital
and
on
investment.
Globalization
may
contribute to economic growth in
developed and developing countries
through increased specialization and
the
principle
of
comparative
advantage.The term can also refer to
the transnational circulation of ideas,
languages, and popular culture.” (1)
What really change the world towards
the globalization specially in economic
sector is the industrialization of the
developed and developing countries. It
started from early 18th century when
the
industrialized
countries
found
shortfall of raw materials for the
production of goods. In order to fullfil
the needs of their domestic customers
they had to find a way to solve this
problems.

“Increased trade led to an ever
increasing network interdependency in
the countries of the world. When
Britain looked to other countries to
satisfy their demand for coal, those
countries began to rely on the revenues
they could gain by exporting coal.
Those countries, in turn, could use
those revenues to buy British goods or
import raw materials that they need
for their own industrialization.” (2) As
countries traded with each other more
consistently and more extensively, they
stopped producing the things they
could
import
more
cheaply
and
concentrated on producing the things
they fabricatd well. In time, individual
countries lost their abilities to produce
certain goods completely, relying on
other countries exclusively to meet that
demand.

That process of specialization also had
an important effect on the raw
materials were produced. As countries
specialized, they
found
that
they
actually produced more value of goods
than they had when they produced
many
different
types
of
goods.
Specialization
also
meant
that
countries known to be particularly
skilled at producing one or two
products became world leaders in the
manufacture of those products. As
other countries wanted to branch out
into producing and producing those
goods, they could use the technology
and
expertise
developed
by
that
country to help them. Even relatively
underdeveloped countries often found
at least one important commodity they
could offer the world. This connected
them to the world economy and pulled
them
away
from
subsistence
agriculture.
As trade between far-flung parts of the
world produced a global economy,
ideas and technology were exported
just as easily as raw materials. As
countries had more and more contact
with each other, they shared their
cultures
including
their
political
philosophy. This is how Smith and
Marx came to be read all over the
world. Globalization meant that people
could no longer think only in terms of
their local area, they had to consider
the outside world as well. Some areas
were more receptive to new ideas, but
no area could shut out new ideas
completely.
Because of globalization, most of the
countries of the world no longer

concentrated on local markets. Their
focus became on regional or even
world markets. It...
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