How would you describe the phenomena globalizationSolutionGl

How would you describe the phenomena globalization?

Solution

Globalization is one of the most frequently used words in today’s world order. However, its meaning is different to different people.

However, in economic terms, it means increased openness of an economy with respect to international trade, capital flows (includes both portfolio investment as well as foreign direct investment), transfer of technology, and free movement of factors of production including labor.

Thus, globalization is nothing but the integration of economies around the world leading to free flow or unrestricted flows of trade, capital, labor, and technology.

Globalization is an attempt to create new economic order around the world. This economic order consists of no trade barriers and unrestricted flow of factors of production among countries.

In recent years, idea of globalization has gained currency on account of increasing or growing economic interaction between different countries around the world.

Both developed and developing countries are inclined towards globalization. Developed countries are pleading for globalization to get benefits in terms of widening the size of market for their products as well as be able to spread their capital and productive investments in optimal manner across different countries.

Developing countries, on the other hand, are peddling for globalization to use it as an opportunity to accelerate the rate of economic growth to catch up with developed economies.