ECON1001 - Topic 2 Globalization

Key Concepts

1. Growth in trade
2. Inward-looking policies
3. Economic Liberalization
4. Immigration and Economic Impact

Globalization is

• the spread of business & trade from domestic to
  global markets

• the way in which national economies are getting
  more interconnected with each other

Technology & Transport

The process of getting “interconnected” and
“interdependent”

The importance of Globalization
includes

1. Growth in world trade
2. Inward looking domestic protectionist
policies
3. Economic Liberalization
4. Immigration

After WWII governments cooperated to create international institutions like:

• MF

• World Bank

• WTO

Inward-looking “Protectionist” plans

• It is done to develop domestic industries
  - The use of the “Infant industry” argument*

• It is done by Import substitution
  - Substitute imports with domestic goods

  • Concerns about protectionism
    - Raises price of capital
    - Increases price of goods for consumers

Economic Liberalization

Globalization leads to economic liberalization which is the
removal of trade restrictions.

Deregulation

The reduction of tariffs by countries.

Immigration

• Immigration is another way by which globalization
  has increased.

  • Immigration into OECD (richer) countries has risen steadily.