The paper "Benefits of Globalisation and Global Economic Integration" is a great example of an assignment on macro and microeconomics. Economic globalization generally refers to the ever rise in the interdependence of global economies due to the fast growth of cross-border trade in products and services, international capital flow as well as rapid and spread of modern technologies. It, therefore, gives a reflection of the mutual integration and continuing expansion of markets. Economists have reasoned that globalization is a trend that can not be reversed in the wake of the ongoing economic developments the world over since the beginning of this millennium.
The two main driving forces of globalization include the fast-growing importance of information in all activities of production and marketization. In fact, the rapid globalization in recent years of the world’ s economies is principally based on the fast development of science and technologies. This has led to a unique business environment where market economic systems are spreading at an alarming rate in the world over. It has also developed on the ground that cross-border labor division has been increasing and penetrated down to the production chain levels within businesses of different countries (Held et.
al. , 1999). The essence of globalization and global economic integration The current advancement in science and technologies has tremendously reduced transportation and communication costs hence making it possible for economic globalization to thrive. For example, the ocean shipping cost at the moment is just half of what it used to cost in the 1930s. The average price of computers two decades ago was only about 1/125 of what it used to cost in the 1960s, and the level of pricing drastically reduced in 1998 by over 80%.
This example of what is known as ‘ time and space compression effect’ brought about by advancement in technology has substantially reduced the cost of cross-border trade and investment, hence making it easier to effectively organize and coordinate the production of goods and services globally. For instance, the Lyman car produced by Ford automaker has its design done in Germany, the gearing system is manufactured in Korea, the engine in Australia and the pump originates from the USA.
It is in fact advancement in technology that has made such kind of global production achievable.
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