Abstract
Globalization refers to the growing economic interdependence of countries worldwide through the increasing volume and variety of cross-border transactions in goods and services and of international capital flows, and also through the more rapid and widespread diffusion of technology. On a broad level, the welfare benefits of globalization are essentially similar to those of specialization and the widening of markets through trade, emphasized by classical economists. By enabling a greater international division of labor and a more efficient allocation of capital, and by increasing the degree of competition faced by firms, globalization raises productivity and average living standards, while broader access to foreign products allows consumers to enjoy a wider range of goods and services at lower cost. On the capital account side, globalization can also confer benefits by allowing a country to mobilize a larger volume of financial savings and by spreading risks more effectively (in part because investors and savers have access to a wider range of fmancial instruments).
This paper draws heavily on Chapter IV of World Economic Outlook, May 1997, IMF.
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Citrin, D., Fischer, S. (2000). Meeting the Challenges of Globalization in the Advanced Economies. In: Wagner, H. (eds) Globalization and Unemployment. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-04082-9_2
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DOI: https://doi.org/10.1007/978-3-662-04082-9_2
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