Globalization and Neoliberalism

In: Business and Management

Submitted By keila2318
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Globalization and Neoliberalism
The process by which businesses or other organizations develop international influence or start operating on an international scale. Process by which the experience of everyday life, marked by the diffusion of commodities and ideas, is becoming standardized around the world. Factors that have contributed to globalization include increasingly sophisticated communications and transportation technologies and services, mass migration and the movement of peoples, a level of economic activity that has outgrown national markets through industrial combinations and commercial groupings that cross national frontiers, and international agreements that reduce the cost of doing business in foreign countries. Globalization offers huge potential profits to companies and nations but has been complicated by widely differing expectations, standards of living, cultures and values, and legal systems as well as unexpected global cause-and-effect linkages.
Globalization is not an inevitable process and there are risks and costs:
-Inequality: Globalization has been linked to rising inequalities in income and wealth. Evidence for this is a rise in the Gini-coefficient and a growing rural–urban divide in countries such as China, India and Brazil.
-Inflation: Strong demand for food and energy has caused a steep rise in commodity prices. Food price inflation (known as afflation) has placed millions of the world’s poorest people at great risk.
-Macroeconomic instability: A decade or more of strong growth, low interest rates, easy credit in developed countries created a boom in share prices and property valuations. The bursting of speculative bubbles prompted the credit crunch and the contagion from that across the world in from 2008 onwards. This had negative effects on poorer & vulnerable nations.
-In 2007-08, financial crises generated in developed…...

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