International economics

Globalisation

Growing interdependence of countries

Factors contributing to globalisation

• Greater trade- removing of tariffs, increased trading blocs

• Increased communication- Increased technology

• Freer movement of people- migration

• Growing TNC- Freer movement of people

Impacts of globalisation

• Consumers

  -More choice

  -Lower prices- as factors of production may be cheaper

  -Higher prices (increasing wages)

  -loss of culture

• Workers

  -Job losses in the west whilst an increase in Asian countries

  -Increase of sweatshops

  -Increased migration- may bring skills but also lower wages

• Producers

  -Firms are able to source resources from more countries

  -Exploit comparative advantage

• Environment

  -Increased emissions

  -Countries can work for greener technology

  -Increased demand for raw materials

• Economic growth

  -Increase of investment

  -TNC may bring world class management and technology

  -Trade will increase output

  -Comparative cost advantages will change over time and so companies may leave the country when it no longer offers them an advantages which will cause structural employ