30 Globalisation
Transcript of 30 Globalisation
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Globalisation
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Globalisation
Definition
Financial globalization
is defined as an amalgamation of
domestic financial system of a particular countrywith the international organizations
as well as financial markets.
The integrationofnational economiesintothe international economy
through trade, foreigndirectinvestment, capitalflows, migration, the
spreadoftechnology, andmilitarypresence.
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Globalisation
Integration of global markets
The integration of global markets by the reduction trade barriers,
improved communication, foreign direct investment, and other
means.
Globalization allows a multinational corporation to make a product
in one country and sell it in another.
This provides jobs in one country and less expensive goods in the
other.
Globalization also allows for the free flow of capital between
countries, which many believe spurs economic growth.
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Integration of global markets
Proponents of globalization argue that it allows developingcountries to continue and hasten their levels of development, andthat it protects consumers in developed countries.
Opponents believe that globalization serves the interests ofmultinational corporations at the expense of small businesses,which sends jobs to other countries needlessly.
Globalization has become a household word literally since early
1990s when Financial Globalization kicked off.
During this period, the trade obstructions between nations werebroken apart, and the flow of capital and corporate investments
between different countries was embarked on.
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Globalisation
Integration of global markets
Massive growth have been noticed in global economy in the
last couple of years, and in the field of technology, moreprecisely in transport and communications there was a silent
revolution which made the globalization of finance an obvious
choice
IMF and World Bank were set up to endorse world tradeto keep up with the growth of Financial Globalization.
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Advantages of Financial Globalization
Enhanced capital flow in each and every country withwhich a country may always remain prepared tocounter any financial crisis.
Capital flows between nations increase which causeswell-organized world allocation of money
Improved living standards of the people.
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Globalisation
Disadvantages of Financial Globalization
If the economy of the country is not strong, it could beaffected by the financial shocks of a different country.
It can cause severe disorder and cost high for stockmarket turbulence, bank failures, corporate bankruptcies,currency depreciation, etc.
The latest example is recession. Most of the countries aremore or less affected due to financial shocks in the U.S.
Sudden reversal of capital can also create a great economicturbulence on a large scale due to Financial Globalization.
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Will globalization be derailed
by the recent world financial crisis?
Inevitably, the answer is yes.
Globalization is a highly dynamic process.
It has produced tremendous benefits.
In many countries,poverty levels have fallen.
Increased trade has been transformative.
But historically, globalization is also vulnerable to terribleand costly backlashes.
We might think of the phenomenon as cyclical.
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