TABANO, Michaela Jeanyvieve

Assignment #2

Economic Globalization
Economic globalization is just one of three major dimensions of globalization commonly found in
academic literature, the other two being political and cultural globalization, as well as the general term
"globalization." The widespread international movement of goods, capital, services, technology, and
information is referred to as economic globalization. It refers to the growing economic integration and
interdependence of national, regional, and local economies around the world as a result of increased
cross-border movement of goods, services, technologies, and capital. Production, finance, markets,
technology, organizational regimes, institutions, corporations, and people are all examples of economic
globalization. Have you ever asked yourself why Economic Globalization an Irreversible Trend?

Economic globalization refers to the growing interdependence of the world's economies. Economic
growth as a result of increased cross-border trade in commodities and services, the flow of international
capital, and the widespread and rapid spread of technologies It reflects the ongoing expansion and mutual
integration of market frontiers, and it is an irreversible trend for global economic development at the
millennium's turn. The two major driving forces for economic globalization are the rapidly increasing
importance of information in all types of productive activities and marketization. In other words, the
recent rapid globalization of the world's economies is largely based on the rapid development of science
and technology, has resulted from an environment in which the market economic system has been rapidly
spreading throughout the world, and has developed on the basis of increasing cross-border division of
labor that has been penetrating down to the local of production chains within different countries'
enterprises. Science and technology advancements have significantly reduced the cost of transportation
and communication, enabling economic globalization. Today's ocean shipping costs half of what it did in
1930, current airfreight costs one-sixth, and telecommunication costs one percent. The price of computers
in 1990 was only about 1/125 of what it was in 1960, and it was reduced again by about 80% in 1998. This
type of 'time and space compression effect' of technological advancement greatly reduced the cost of
international trade and investment, allowing global production to be organized and coordinated. For
example, Ford's Lyman car is designed in Germany, with the gearing system manufactured in Korea, the
pump manufactured in the United States, and the engine manufactured in Australia. It is precisely
technological progress. The financial sector's globalization has become the most rapidly developing and
influential aspect of economic globalization. International finance arose to meet the demands of
international trade and investment. However, as economic globalization has progressed, it has become
increasingly independent. In comparison to commodity and labor markets, the financial market is the
only one that has achieved true globalization.

Globalization of the economy is also a process of global industrial restructuring and readjustment. With
the advancement of science and technology, as well as the rise in income levels, industrial structures in all
countries have been readjusted and upgraded. In recent years, developed countries in the west have
gradually entered the era of knowledge economy and have begun to shift many labor-intensive industries
with low international competitiveness to developing countries. This process of cross-country shift is
accelerating the development of economic globalization. On the other hand, there has been a productivity
surplus since the end of the cold war.

Eventually, economic globalization is unstoppable. Globalization is irreversible because it is the result of a

powerful innovation trend that shows no signs of abating. It also corresponds to the true aspirations of
economic agents, even if some of them are not always aware of it and sometimes refuse to admit it.