Globalization and Its Impact on International Finance

Only available on StudyMode
  • Download(s) : 949
  • Published : March 22, 2011
Open Document
Text Preview
GLOBALIZATION AND ITS IMPACT ON INTERNATIONAL FINANCE

CONTENTS
1. Overview……………………………………………………………………...1 2. Introduction to the concept of globalization…………………………………..2 3. Different areas of effect of globalization……………………………………..5 4. International finance…………………………………………………………..9 5. The impact of globalization on international finance

i. Relationship between globalization and international finance……....12 ii. Globalization and its impact on developing countries……………….14 iii. Positive & Negative effects of globalization on international finance………………………………………………………………17 iv. Impact of globalization of international finance on global financial crisis………………………………………………………………….21 6. Summary and conclusion……………………….……………………………24 7. References…………………………………………………………………...25

OVERVIEW
Human societies across the globe have established closer contacts over many centuries. Recently, the global integration has dramatically increased. The major changes in communications, transportation, and computer technology have given the process new impetus and made the world more interdependent than ever. Multinational corporations manufacture products in many countries and sell to consumers around the world. Money, technology and raw materials move ever more swiftly across national borders. Along with products and finances, ideas and cultures circulate more freely around the world. As a result of this, laws, economies, and social movements are forming at the international level. International finance is the branch of economics that studies the dynamics of exchange rates, foreign investment, and how these affect international trade. The implications of globalisation for international finance are many. Developing countries are the mostly affected. The recent wave of financial globalization has been marked by a surge in capital flows among industrial countries and, more notably, between industrial and developing countries. Although capital inflows have been associated with high growth rates in some developing countries, a number of them have also experienced periodic collapses in growth rates and significant financial crises that have had substantial macroeconomic and social costs. Despite widespread agreement that the international financial system and the global economy stand to benefit from the development and adoption of internationally agreed codes and standards, such efforts are not without their critics and detractors. The great financial crisis of 2008-09 has revealed the dangers of an unstable, deregulated, global economy and finance but it has also given rise to important global initiatives for change. The report intends to analyze the impact of globalization on international finance. Starting with an initial introduction to the broad concept of globalization and various different areas affected by it, the report next focuses on international finance providing a brief description prior to moving on to detailed discussion of the relationship between globalization and international finance. Detailed discussion based on above highlighted areas finally concludes with a brief summary. INTRODUCTION TO THE CONCEPT OF GLOBALIZATION

The term “globalization” has quickly become one of the most fashionable buzzwords of contemporary political and academic backgrounds by covering a wide range of distinct political, economic, and cultural trends.

Definitions of Globalization from different scholars
“Globalization is a widely-used term that can be defined in a number of different ways. When used in an economic context, it refers to the reduction and removal of barriers between national borders in order to facilitate the flow of goods, capital, services and labour.”
The United Nations ESCWA

“Globalization is defined as the diminution or elimination of state-enforced restrictions on exchanges across borders and the...
tracking img