The Impact Of Globalisation On The Uk Economy Essay

Decent Essays
Introduction In the past few months, the Brexit referendum attracted the attention from the whole world. The globalisation has made the world today far more connected than ever so that every country could be affected by this big event. The globalisation has had profound and lasting influences to UK economy. This essay will firstly focus on the pros and cons of globalisation, then discuss the UK sectors which benefited and suffered from globalisation respectively, finally analysis the overall effect of globalisation on the UK economy. Pros of globalisation First of all, Globalisation helps to promote international division of labour. According to Heckscher-Ohlin theory (Gerber, 2014, pp.72-76), nations are endowed with different levels of each production factors which have determined their comparative advantage. When trade open, a country will specialise in producing its comparative advantage products and choose to import comparative disadvantage products from other countries. By specialising in the production of comparative advantage product, it can achieve economies of scale. Then the cost of production will decrease. One of the most intuitive senses will be the less expensive product because people can purchase imported comparative disadvantage product and indigenous comparative advantage product both at lower prices than in the past. In addition, it helps to optimise the configuration and utilisation of global factors. A country’s production is limited by its factor
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