8) Globalisation - MMT Flashcards
what is globalisation?
Globalisation is the process of interaction and integration among people, companies, and governments worldwide. It has made the world a much smaller place.
what are the consequences of globalisation?
One of the main consequences of globalisation has been a significant increase in the volume of goods being traded internationally i.e. imports and exports.
what are the 5 causes of globalisation? FETTT
- Improved transport
- Improved technology,
- Firms exploiting economies of scale
- Reduced trade barriers between countries
- Growth of global financial system
causes of globalisation: improved transport
particularly air transport and sea transport. The invention of containers is particularly vital, allowing far more goods to be transported at one time (containerisation).
causes of globalisation: improved technology
Improved technology, in particular the growth of the internet and electronic meetings e.g. zoom. This enabled the growth of global media (e.g. Netflix/CNN) increasing information available across the globe which in turn increased mobility of labour (migration).
causes of globalisation: firms exploiting economies of scale
Firms exploiting economies of scale enabling huge growth in the quantity and power of multinational companies, obviously helped by points 1 and 2 above.
causes of globalisation: reduced trade barriers between countries
Reduced trade barriers between countries including the growth of trading blocs such as the EU, which eliminated all internal trade barriers.
causes of globalisation: growth of the financial system
Growth of global financial system making capital (e.g. money transfers) much more mobile than before-increased mobility of capital.
consequences of globalisation: 7 things TCTSMBE
MCBETTS
Greater trade in goods and services between the world’s economies.
Greater transfer of financial capital between the world’s economies and greater FDI.
Greater transter of technology and information senor canteen ech compas
• Greater specialisation in production including outsourcing and offshoring (e.g. British manufacturers setting up factories or call-centres in India to benefit from cheaper labour).
• Greater labour migration both within and between the world economies.
• Development of global brands, recognised in almost every country.
• The inclusion of more economies in the global trading system.
why is globalisation good for developed economies?
Good for developed economies as most MNCs come from there meaning that profits and income flow back to them. Also, benefit from inward migration, providing cheap labour
why is globalisation good for emerging economies?
Good for emerging economies (eg India) - as MNCs have moved in they’ve created vast job opportunities-higher income/more development/large scale industrialisation/more choice for consumers
why is globalisation good for developing economies?
Good for developing economies-same as above really except more focus on improving infrastructure, higher standard of living, significant reduction in absolute poverty, less focus on industrialisation.
why is globalisation bad for developed countries?
Bad for developed countries as traditional jobs & industries have disappeared. More inequality. Lots of immigration puts pressure on public services & reduces wage levels
why is globalisation bad for emerging countries?
Bad for emerging countries as their traditional lifestyle and identity gets lost; the environment suffers badly; profits and capital tend to leave the country for developed countries and there is often a brain drain as many of the brightest and best young people leave the country.
why is globalisation bad for developing countries?
Bad for developing countries in exactly the same was for emerging, except worse as they have far less power. Also, more likely that MNCs will abandon developing countries due to this
