1
Q
define globalisation
A
process in which national economies become increasingly integrated and inter dependant
2
Q
what are the characteristics of globalisation?
A
- increase in a country’s trade to GDP ratio
- growth in global supply chains: The fragmentation of production processes across countries has given rise to complex global supply chains, where components of products are manufactured in different countries before being assembled elsewhere.
- increased international labour migration
- TNCs
- more FDI
3
Q
what are the factors that have led to globalisation?
A
- Improvements in transportation infrastructure, such as containerization and the expansion of shipping routes, have made it easier and cheaper to move goods globally
- development of information technology, including the internet and mobile communications, has significantly reduced communication and transportation costs, facilitating global business operations
- trade liberalisation: removal of trade barriers
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4
Q
what are the main gains from globalisation?
A
- consumer and producer benefits from economies of scale and division of labour
- competitive markets reduce monopoly power and incentivise businesses to seek cost reducing innovations
- higher per capita incomes and has helped many poorer countries reduce absolute poverty and achieve higher growth
- free movement of labour (skill transfer)
- dynamic efficeny gains from the diffusuion of technology across national borders
- opening up capital markets increasing the opporunities for developing countries to borrow money to help overcome a domestic savings gap
- increased awarness regarding climate chnage/ income and wealth equality
- competitive pressures of globalisation may prompt improved governance and better labour protection through improved business standards
5
Q
by how much has extreme poverty reduced since globalisation?
A
world bank says in 1990 less than 37% of world living in extreme poverty
6
Q
what are some potential diagrams that could be drawn from advatantages of globalisation?
A
- outwards shift in PPF
- PPF gains in comparative advatntages specialisation and trade
- AD/AS
- gains from trade liberalisation (tarrif diagram)
7
Q
what have been the main disadvantages of globalisation?
firms, government, consumers,workers, enviroment
A
- rising inequalitiy becuase of rising relative poverty
- macro economic fragility: Globalization makes economies more interconnected, meaning that economic disruptions in one part of the world can quickly spread to others. For example, the 2008 Global Financial Crisis originated in the U.S. housing market but quickly spread to other countries due to interconnected financial systems and trade linkages.
- current account deficit and trade implamaces–>
- structural unemployment TNCs often relocate to countries with lower labor costs to remain competitive. This can lead to job losses in higher-cost countries, particularly in manufacturing and low-skilled service sectors.Globalization accelerates the spread of technology and automation. Companies adopt advanced technologies to compete globally, which can replace human labor, especially in routine or repetitive tasks.
- enviromental: rising of indsutrial processes: land degradation, deforesation,loss of biodiversity
- large TNCs pushing out domestic producers
- tax avoidance through transfer pricing
- exploitations of labour
8
Q
A
