Economics of Globalisation
Globalisation involves
- Economic Forces are increasingly affecting the World Economy and not just the domestic economy
- National Economies are becoming more closely integrated with each other. For example the Common Market in the EU, harmonization of Monetary Policy. But also closer integration in America and Africa
- Increase in World Trade, Tariffs and other impediments to world trade have gradually been reduced leading to an increase in world trade.
- GATT and later the WTO has been instrumental in bringing about a more integrated and interdependent global economy
- Economies tend to move in trade cycles together. A slow down in US growth has an impact on the whole world economy, because of the importance of trade.
- Monetary Policy is linked between the economies, if US cuts its interest rate, this is likely to lead other countries to cut theirs
- At the Firm level more product markets have become open to international influences due to
- Globalisation of brands e.g. McDonalds
- Growth of Multinationals through Mergers and internal expansion, this is noticeable in Pharmaceuticals, airlines, oil processing leading to the growth of global oligopolies
- At a personal level people can shop on the internet buying books in the UK from the US
Revision Notes and Essays on International Trade
Effects Globalisation on UK Economy
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