Globalization : The New Era Of Global Flows

883 Words4 Pages
Modern research suggests globalization is coming is coming to an end. The World Trade Organization estimates the volume of international trade to grow by just 2.8% this year, marking the fifth consecutive year of subpar growth. The unusual patterns in cross border flows since the financial crisis have undermined traditional economic relationships and contributed to some of the volatility the market is seeing today. However, in reality, we are entering a new phase of globalization defined by flows of data and information. Digital flows, which were virtually nonexistent at the turn of the millennium, now exert a larger impact on GDP growth than the age old trade in goods. According to a recent Mckinsey report, Digital globalization: The new era of global flows, found that trade of all kind contributed 10% or roughly $7.8 trillion to global GDP. Data alone accounted for $2.8 trillion of this gain and is exponentially growing each year. Although this shift creates a greater degree of connectedness between economies, it also poses new risk and policy challenges.


The world is more connected than ever, whether that’s through a stream of cross border capital flows or this new wave of digital disruption. In the past globalization was confined to trade between advanced economies or resource heavy countries. This gave consumers in the U.S. and Europe the access to items made by people in developing countries for a third of the cost. Over time trade barrier were
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