Assignment 1, version A
1. Consider whether the shift toward a more integrated and interdependent global economy is a good thing. Discuss the shift from the eyes of the consumer, the worker, the company, and the environmentalist.
There are many advantages of globalization. From a broad perspective, globalization creates economic activity (which stimulates economic growth), creates jobs, raises income levels and provides consumers with more choices in regard to the products and services that are available to them. From the eyes of an individual firm, globalization has the potential to increase revenues (through expanded market potential), drive down costs (through additional economies of scale) and boost profits.
There are critics that argue that globalization destroys manufacturing jobs in wealthy countries and contributes to pollution. Critics argue that falling trade barriers allow firms in industrialized countries to move their manufacturing activities offshore to countries where wage rates are much lower. Critics also argue that globalization encourages firms from advanced nations to move manufacturing facilities offshore to less developed countries to avoid the more stringent pollution controls in place in their home countries.
2. According to Joseph Stiglitz, in his video called “Making Globalization Work,” what were the original expectations about how globalization would affect global disparities, inequality and poverty? What evidence does Stiglitz offer showing those expectations were wrong?
Economic theory predicted that disparities between rich and poor would be narrowed. In fact those disparities have increased. Not only between rich and poor countries but also within most countries around the world, level of inequality has increased. Globalization has something to do with it. Globalization has not been managed well so disparity has increased. One of the reasons it has not been managed well is the lack of access to technology,...
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