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Economic Globalization Is Not Always Beneficial
Niko 20120101123 Economic globalization is the increasing interdependence among the countries of the global economy through the expansion of transnational corporations, service busine, scale of capital flow and widely applied technology(IMF 12).It is one of the most significant features of the global economy, including production globalization, capital globalization and trade globalization.Economic globalization has been occurred for the last several hundred years and is growing rapidly.Although its development makes better resource allocation in the world, economic globalization is eentially a spontaneous proce of market mechanics.It is benefit-oriented without macro-control and will not self-regulate in ways to ensure fair distribution of benefits, causing instability in the world economy(Xu 98).Because of the instability of economy and other reasons, economic globalization is not always beneficial for all nations.Economic globalization is developing without a negotiation mechanism, causing the instability of the world economy, and as the global economic chain becomes increasingly closer, the poibility of causing an economic crisis is more likely than before.In 1987, the United States changed its monetary policy for curbing inflation before Europe.The action caused the dollar-backed Hong Kong stock exchange to collapse, and the crash spread to Europe and hit the United States and other markets(Roll 32).On October 19th, 1987, when the Dow Jones Industrial Average lost 22.6 %(Browning 76), similar stock markets around the world dropped an enormous percentage.In the new and global world of closely interdependent economies, the crisis affected almost every part of the world, receiving extensive coverage in the international media(Chanda 53).It caused great damage to the worldwide economy.Currently, in the proce of economic globalization, most nations are increasingly globally interconnected.When energy prices are soaring and financial problems are uncontrollable, the crisis will spread widely like a chain reaction.As the global economic chain is increasingly tightened, the conduction speed of the influence of the world economic crisis is much more widespread than ever before(Reed 78).Thus, the instability of the world economy following economic globalization reveals that it sometimes impacts national economies badly(Sterling 34).Economic globalization aggravated the further imbalance of world economic development, and the gap between developing countries and developed countries has been widened.In developing countries, domestic industries are facing great challenges because overseas enterprises are in a period of rapid growth, graining the market share and causing some countries much impecunious(Smith 83).However, countries with stronger competitivene like the United States, the real GDP yearly had grown from 2001 to 2007, especially the export trade(Bernstein 109).For trade globalization, economic globalization will bring the import of foreign products into domestic economies.However, the exce amount of imported products can diminish the competitivene of the domestic products because imported products generally are cheaper and have higher quality(Cotton 91).Also, economic globalization must cause resource sharing and create linkages to economic systems, which can also cause unfairne between developed countries and developing countries.Under the competitive mechanism, the wealth of the le competitive nations will be allocated by the much more competitive nations, impacting economic inequality within societies(Zhang 88).Following the trend of globalization, many organizations were established to accommodate the new economic environment.As the contacts among members in the organizations have been strengthened, the independence of national economic sovereignty is facing increasingly serious challenges(Li 68).Each member in the European Union should transfer its economic sovereignty, using the same currency and weakening the tariff protection to achieve the goal of regional economic integration, which caused the declining of economic sovereignty independence of each member in the European Union.Under the control of supranational bodies, each member can not optionally discharge their duties(Abdin 132).Another harm is when an economic crisis happens in one member, others have to decide whether to help those in debt or not, and most times they should help to avoid the crash from spreading(Chapman 78).Economic globalization drives the global economic integration, but it is still a great problem for members to balance the economy and sovereignty.Economic globalization causes global economic instability with economic crises and inflation, and the gap between the developed nations and developing nations has reached the degree of polarization.As for some nations in regional economic integration, they are facing challenges of sovereignty.Although economic globalization fuels the world economy to grow, bringing the world chances to boost economic development, it still does harm to some nations’ economies in the proce.Because of the disadvantages of economic globalization, countries, especially developing countries, should be based on the condition of self-development, gradually attaching to the world economy and actively cooperating with global and regional integration.In a word, economic globalization is a trend, but it still has its defects.Work Cited Abdin, Joynal.The European Union.London: Oxford University Pre, 2009.Bernstein, Jared.Does inequality prevent economic growth? New York: Busine Books UP, 2012 Browning, E.S.“Exorcising Ghosts of Octobers Past.” The Wall Street Journal，October 2007.Chanda, Nayan.What Is Globalization? New Haven: Yale University UP, 2003.Chapman, Bruno.Macroeconomic.Boston: Twayne Publisher, 1998.Cotton, Gregory.The Theory of Economic Growth.New York: Chelsa House Publisher, 1999.Li, Hongmei.International Economic Organizations.Shanghai: Engineering Industry UP, 2012.Reed, Chandler.The Principles of Economy.New York: Columbia UP, 2001.Research Dept,.International Monetary Fund.World Economic Outlook.Washington,DC: International Monetary Fund, 2005.Roll, Richard.“Is World Economy M&A Regulation Protectionist?” The Economic Journal, April 2007.Smith, Perry.Contemporary Society: An Introduction to Social Science.New York: Pearson Education, 1972.Sterling, Steve.Nations.London: Cambridge University Pre, 2007.Xu, Shaoqiang.New Financial.Shanghai: Changjiang UP, 2008.Zhang, Jun.The World Economy.Bejing: Fudan University UP, 2010.
