The Globalization of Markets

According to Edwards (1999), globalization reflects a business orientation based on the belief that the human is becoming more homogenous and that distinctions between national markets atomic number 18 not only fading but, for some products, depart last disappear. Ideologically as well as practically, globalization reflects the innocent(p) flow of information, trade, goods, and ceiling as well as population across increasingly meaningless national borders. On a macroeconomic level market convergence is achieved via the removal of physical, fiscal, technical foul barriers and the liberalisation of internal competition.

Key features of globalization acknowledge:

1. The removal of physical barriers include those that restrict the movement of goods and the movement of state leading to a decrease yielding in a decrease of transaction cost. Furthermore labour can go where it is most beneficial.

2. The removal of fiscal barriers includes the restriction on capital movement, leading to a more open access for investors to markets. These include tariffs as other trade distorting measures.

3. Technological convergence direction trading blocks as the North American Free make out Alliance (NAFTA) or the European Union (EU) implement a common technological standard to avoid duplication costs and sub-optimal manufacturing bore.

4. The removal of barriers across the world is design

Harper, Harper, and Coronel (2002) pointed out that the process of " long horseization" in which individuals and companies prefer to deal in dollars is increasing in popularity as globalization increases. The appeal of the dollar as a money of choice is that it is seen by some an(prenominal) economists are more stable than other currencies. The International monetary Stability Act of 2000, introduced in the U.S. Congress by author Senator Connie Mack III, would allow (if passed into law) nations to adopt the U.S. dollar as their deliver currency. The bill was designed to extend the price stability that has been feature of the American economy to other national economies.

It would have the solution of slowing runaway inflation, an economic problem that negatively impacts upon many national economies. El Salvador, Panama, and Ecuador have adopted the dollar, and Mexico would like to quest for suit (Harper, et al, 2002). Creating a single dominant global currency is seen as one of the advantages of globalization.

The proponents of globalization and the free movement of capital, goods and delve across national borders have argued that in the long run, these flows get out facilitate national as well as outside(a) buzz offment, providing the financial support needed for a country to develop its economic infrastructure, creating jobs, improving personal income as well as Gross National and Domestic Products (GNP and GDP), and otherwise improving the quality of life enjoyed by people everywhere (Obstfeld, 2000).

Another use of globalization was described by Kroll (2002). This writer pointed out that the business exchanges themselves are going global. Over the course of the next cinque to ten years, transactions on the stock exchanges are anticipate to be between companies and investors from different countries. As investors find it easier to flat buy and sell shares in businesses around the globe, it is likely that they will put more of their money into those companies pro
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