Globalization Perpetuates Economic Interdependence between Countries

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Globalization perpetuates economic interdependence between countries. Through the increasing volume of goods and services transferred across borders, globalization has created international capital flow and boosted the rapid diffusion of technology. According to Dr. Ismail Shariff, “globalization is the worldwide process of homogenizing prices, products, wages, rates of interest and profit.” Three forces control the manner by which globalization furthers developments. These factors include the role of human migration, international trade, and integration of financial markets. By discussing the pros and cons of globalization, a correlation between these factors reveal the intertwined web known as world trade. Thomas Friedman once said,…show more content…
but only left to find out the way in which it can be employed with the greatest advantage." Determining what county has the comparative advantage is at the core of globalization. As a result of countries being able to maximize their manufacturing abilities, productivity and living standards rose in surrounding locations. Outsourcing production to other countries creates jobs in remote locations. In addition, globalization creates global competition. Global competition allows nations with the comparative advantage to produce goods at a cheap cost, which keeps prices low for consumers. By keeping prices low, counties are able to decrease the opportunity for inflation to derail economic growth. Furthermore, globalization spurs innovation and presents the market with new innovative ideas formed to global collaboration. Technological innovation is among the many benefits of globalization. Globalization and unfettered capital flow, grants the United States access to foreign investment and allows the interest rates to remain low; in turn, allowing consumers to invest more in the economy. While globalization has had its benefits, there are also controversial consequences as well. Those opposed to globalization draw their conclusion from the understanding that millions of Americans have lost their jobs due to factories and productions being shifted too other countries. As globalization continues to expand,

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