Globalization - Research Paper Example

Download file to see previous pages... Development of international media such as radios, televisions and the international web are examples of avenues towards interconnections. Economic factors also contribute to international connections through demand and supply forces that move resources from their regions of surplus productions to areas that experience scarcity across regional and international borders. Another concept of globalization is its “rapid and discontinuous change” with time and across regions as indicated by historical data (Parker, 2005, P. 7). The level of developed interconnections for example grows with identified kinks that relates to major economic changes in regions. Different communication efficiencies across regions also identify variation in the rate of globalization across different areas. This is because initiated factors in a region transfers to other regions at different speeds, based on the achieved regional connections (Parker, 2005). Higher number of different participants in economic units also defines globalization. Its concept of interlinked domestic economies and developed international transportation and communication infrastructure for example allows more players, who were previously disadvantaged, to gain access and explore foreign markets. The increased number and types of participants also identifies increased level of complexity in the formed networks, a factor of the interlinked cultures and systems (Parker, 2005). Interdependence is another concept of globalization that has largely manifested across territorial boundaries. Economic interdependence has for example led to specialization among countries and international trade for exchange. Political interdependence is also evidence through developed diplomatic ties among nations. Existence of international organizations with regulatory authority over members also identifies dependence as a concept of globalization (Milardovic, Paukovic and Vidovic, 2008). The following graph shows the non-uniform trend in GDP and imports, indicators of globalization, for the United States. The forecast shows non-uniform but constantly changing trend in the values or GDP an imports in the future short run, an indication of forecasted kinky impacts of globalization. (WTO, 2012) Differences between an open and a close economy The major difference between open and closed economies is their different exposure to international markets. An open economy lacks barriers to international trade while a close economy has strict limitation to international trade. An open economy is therefore vulnerable to consequences of globalization than a close economy. Restricted international trade also identifies lack of exportation, importation, and transfer of assets into a close economy. The elements are however characteristics of an open economy (Arnold, 2008). Advantages and disadvantages of a country with an open economy A country with an open economy has a number of advantages and disadvantages that are associated with the allowed international trade between the country and foreign markets. The transfer of commodities across the country’s borders for example allows its citizens to access varieties of commodities that are produced in other markets. This improves consumers’ utility levels. Available international market also promotes surplus production for higher income. Further, an open economy has associated increased employment opportunities than if ...Download file to see next pagesRead More