What is Globalization?
So, we first have to ask ourselves what globalization is regarding economics. Globalization has to do with world economics, cultures, and different technologies portrayed in various forms worldwide. Globalization is a perfect term to show how countries connect with one another across the globe in an international trade sense. Surprisingly global integration (another way to say globalization) didn’t take off until the 19th century. Only then did different countries start to communicate with each other when it came to trade. Trade as of 2022 has skyrocketed over the past century; the United States trade levels, in fact, grew so high that they exceeded a third of its own GDP. The world trade volume overall is now past half of the world’s GDP. Finally, there are six different effects of globalization.
6 Effects of Globalization
Starting with more ‘goods at lower prices, meaning countries can negotiate and communicate with each other to lower production costs. The second effect is ‘scaled up businesses,’ a way companies can attract more customers to make their business grow at a worldwide scale. The third effect is ‘better quality and variety,’ a way for companies to improve the quality of their products and make sure customer satisfaction is enabled. The fourth effect is ‘innovation,’ how leaders of companies can change and impact the way their company or product works. The fifth effect is ‘job churn,’ basically, the employee turnover rate and how that can affect the economy, let alone the global economy overall, if there are not a lot of people working. The last effect is ‘decline in inequality globally, but more comprehensive within United States’ breaking it down that basically means how economic inequality is lowering globally but, it’s a big issue in the United States still. So, all those topics are a good look and introduction to ‘Economics and Globalization.