Year 12 Economics
The Global Economy Assignment
By Horton Yip
The Global Economy - Research Assignment
Part a) Features of a Globalised World Economy
Globalisation can be described as the process of transformation of local or regional economies into global ones. This process is a combination of economic, technological, sociocultural and political forces. Globalisation is often used to refer to economic globalisation, that is, integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology.
Globalisation has various aspects which affects the world in several different ways such as:
Industrial - Allows worldwide production markets and a broader access to a range of foreign goods and services. Globalisation allows trade of goods between countries which benefit both countries in a win-win situation.
Financial - emergence of worldwide financial markets and better access to external financing for borrowers. Simultaneous though not necessarily purely globalist is the emergence of under or un-regulated foreign exchange and speculative markets.
Political - Globalisation has introduced the creation of a world government, or cartels of governments (e.g. WTO, World Bank, and IMF) which regulate the relationships among governments around the world and guarantees the rights arising from social and economic globalisation. For the past few decades, the USA has been a major force in the world economy, because of its strong and wealthy economy. The influence of globalisation and the aid of the US's economy, China has experienced some tremendous growth within the past decade. If China continues to expand at its current rate, then it is very likely that in the next twenty years, it will overpower USA as the major economic force of the world.
Competition - Globalisation has caused competition in the economy. Survival in the new global business market calls for improved...