Economic globalization is the increasing economic integration and interdependence of national, regional, and local economies across the world through an intensification of cross-border movement of goods, services, technologies, and capital.
Whereas globalization is a broad set of processes concerning multiple networks of economic, political, and cultural interchange, contemporary economic globalization is propelled by the rapidly growing significance of information in all types of productive activities and marketing, and by developments in science and technology.
Economic globalization primarily comprises the globalization of production and finance, markets and technology, organizational regimes and institutions, corporations and labor.
Economic globalization
While economic globalization has been expanding since the emergence of trans-national trade, it has grown at an increased rate over the last 20–30 years under the framework of the General Agreement on Tariffs and Trade and the World Trade Organization, which made countries gradually cut down trade barriers and open up their current accounts and capital accounts.
This recent boom has been largely accounted for by developed economies integrating with less developed economies, by means of foreign direct investment, the reduction of trade barriers, and in many cases cross-border immigration.
While globalization has radically increased incomes and economic growth in developing countries and lowered consumer prices in developed countries, it also changes the power balance between developing and developed countries and has an impact on the culture of each affected country.
And the shifting location of goods production has caused many jobs to cross borders, requiring some workers in developed countries to change careers.
According to the International Monetary Fund, the growth benefits of economic globalization are widely shared. While several globalization countries have seen an increase in inequality, most notably China, this increase in inequality is a result of domestic liberalization, restrictions on internal migration, and agricultural policies, rather than a result of international trade.
Poverty has been reduced as evidenced by a 5.4 percent annual growth in income for the poorest fifth of the population of Malaysia.
Even in China, where inequality continues to be a problem, the poorest fifth of the population saw a 3.8 percent annual growth in income. In several countries, those living below the dollar-per-day poverty threshold declined.
In China, the rate declined from 20 to 15 percent and in Bangladesh, the rate dropped from 43 to 36 percent. Globalization is narrowing the per capita income gap between the rich and the globalizing nations. China, India, and Bangladesh, once among the poorest countries in the world, have greatly narrowed inequality due to their economic expansion
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