Economic Globalization
Economic globalization is the increasing integration and interdependence of national economies through the cross-border movement of goods, services, capital, technology, and labour. It is one of the defining features of the modern world economy and has profound effects on growth, employment, and inequality.[1]
Definition
Economic globalization refers to the process by which markets, production, and finance become increasingly interconnected across national borders. It encompasses trade in goods and services, foreign direct investment, capital flows, migration, and the diffusion of technology and information.[1]
Dimensions
| Dimension | Description |
|---|---|
| Trade | Growth in cross-border trade in goods and services. |
| Investment | Expansion of foreign direct investment and multinational firms. |
| Finance | Integration of capital markets and cross-border capital flows. |
| Technology | Diffusion of technology and information across borders. |
| Labour | Migration of workers across countries. |
Drivers
The main drivers of economic globalization include trade liberalisation, advances in transportation and information technology, the rise of global value chains, and the policies of governments that have opened their economies to trade and investment.[1]
Benefits and criticisms
Benefits cited include access to larger markets, lower prices, technology transfer, and the diffusion of ideas. Criticisms include the disruption of domestic industries, rising inequality, the erosion of labour and environmental standards, and the vulnerability of economies to external shocks. These debates are closely related to those over Free Trade and Trade Protectionism.[1]