Economics UFP Report: Globalisation's Effects on Australian Economy
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This economics report examines the impact of economic globalisation on Australia, focusing on the macroeconomic indicators of national output/income, unemployment, current account balance, inflation, inequality, and exchange rates. The report defines globalisation and analyzes how it has affected these indicators, presenting both advantages and disadvantages. Advantages include improvements in national income, a decline in the unemployment rate, and improvements in exports, while disadvantages include a rise in income inequality and the impact on the manufacturing industry, affecting the current account balance. The report concludes that globalisation is beneficial for Australia, suggesting policy recommendations for managing income inequality and promoting job opportunities. The report uses data and statistics to support its analysis, drawing on various sources to present a comprehensive overview of the topic.
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Economics 1
Contents
Introduction......................................................................................................................................2
Macroeconomic indicators of Australia...........................................................................................3
Globalisation has affected these macroeconomic indicators...........................................................5
Conclusion.......................................................................................................................................9
References......................................................................................................................................10
Contents
Introduction......................................................................................................................................2
Macroeconomic indicators of Australia...........................................................................................3
Globalisation has affected these macroeconomic indicators...........................................................5
Conclusion.......................................................................................................................................9
References......................................................................................................................................10
Economics 2
Introduction
The aim of the paper is to reflect benefits of the economic globalisation have outweighed the
costs and it talks about how more or less globalisation is beneficial for future of the country. The
country that has been selected for this assessment is Australia as it is a member of WTO as it has
gained status of observer. Australia is one of the sovereign countries that are comprised of the
mainland of continent of Australia. Generations of the Australian citizen have witnessed and
experienced that many changes of Australia society because of Globalisation. The term
globalisation can be defined as an increasing flow of goods as well as services, capital and labour
among the increasing number of countries. It is considered as ever-rising integration of the
world’s local, regional, as well as national economy into the single international market.
Globalisation is one of the major forms of this revolution that is continued to change majorly
within country. The research on macroeconomic indicators has been done which include
different like inflation, unemployment, exchange rate and many others. Once the indicators are,
research then it includes how globalisation has affected these indicators of Australia and
identifies these are beneficial or not.
Introduction
The aim of the paper is to reflect benefits of the economic globalisation have outweighed the
costs and it talks about how more or less globalisation is beneficial for future of the country. The
country that has been selected for this assessment is Australia as it is a member of WTO as it has
gained status of observer. Australia is one of the sovereign countries that are comprised of the
mainland of continent of Australia. Generations of the Australian citizen have witnessed and
experienced that many changes of Australia society because of Globalisation. The term
globalisation can be defined as an increasing flow of goods as well as services, capital and labour
among the increasing number of countries. It is considered as ever-rising integration of the
world’s local, regional, as well as national economy into the single international market.
Globalisation is one of the major forms of this revolution that is continued to change majorly
within country. The research on macroeconomic indicators has been done which include
different like inflation, unemployment, exchange rate and many others. Once the indicators are,
research then it includes how globalisation has affected these indicators of Australia and
identifies these are beneficial or not.
Economics 3
Macroeconomic indicators of Australia
Macroeconomic is a division of economics that has readings how collective economy behaves.
The below given are the macroeconomic indicators of the Australia: -
Macroeconomic
indicators
Description
National Output/Income The gross national income of the Australia was reported at
455,550.000 AUD mn in Mar 2019. This has been found that there
is decrease in the national income from the previous year in which
the income was 482,797.000 AUD mn for Dec 2018 (Trading
Economics, 2019). This indicates that the income is less that might
lead to decline in the economy of the country.
Unemployment It has been witnessed that Australia seasonal unemployment is
adjusted rate is equal to 5.2% in May 2019, that is unchanged from
the previous months eighth month-high and it is above the market
expectation of approx. 5.1% (Trading Economics, 2019). It has
been found that unemployment rate is improving in May despite
the present economic slowdown within the country. The country is
supposed to add more than twice as many new jobs as forecast
(Shane, 2019).
Current Account Balance In the economics, the country’s present account is comprised of
two components of its balance related to payment and the other
being capital account. The present account consist balance of
Macroeconomic indicators of Australia
Macroeconomic is a division of economics that has readings how collective economy behaves.
The below given are the macroeconomic indicators of the Australia: -
Macroeconomic
indicators
Description
National Output/Income The gross national income of the Australia was reported at
455,550.000 AUD mn in Mar 2019. This has been found that there
is decrease in the national income from the previous year in which
the income was 482,797.000 AUD mn for Dec 2018 (Trading
Economics, 2019). This indicates that the income is less that might
lead to decline in the economy of the country.
Unemployment It has been witnessed that Australia seasonal unemployment is
adjusted rate is equal to 5.2% in May 2019, that is unchanged from
the previous months eighth month-high and it is above the market
expectation of approx. 5.1% (Trading Economics, 2019). It has
been found that unemployment rate is improving in May despite
the present economic slowdown within the country. The country is
supposed to add more than twice as many new jobs as forecast
(Shane, 2019).
Current Account Balance In the economics, the country’s present account is comprised of
two components of its balance related to payment and the other
being capital account. The present account consist balance of
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Economics 4
trade, net main revenue or aspect income as well as the net cash
transfers. One of the Macroeconomic indicator Australia’s Current
Account that has noted a deficit amount of 2.1 USD in month of
Mar 2019, associated with a deficit of 4.5 USD bn in preceding
sector (CIEC, 2019).
Inflation In economics, inflation is a sustained has upsurge in the overall
price level of products and services in an economy in period. The
yearly inflation rate of Australia market fell to 1.3% in the first
quarter of 2019 from 1.8% in the preceding period as well as
missing market expectation of 1.5% (Australia Inflation Rate,
2019).
Inequality The inequality can be of different types but over here, the major
discussion is related to the inequality of income. The level of
Australia income is more inadequate than OECD average but
equivalent than the other countries who communicate in English
that includes UK and US as these countries are able to maintain
the high level of inequality (Douglas, 2015). In the research, this is
witnessed that inequality in Australia is continue to improve with
the average prosperity of uppermost 20% rose by 53% (to $2.9%
million) from the year 2003 to 2016 (Australian Council of Social
Service, 2018).
Exchange Rates In Australia, rate of exchange of currency between Australia and
other overseas currencies are major articulated in expressions of
trade, net main revenue or aspect income as well as the net cash
transfers. One of the Macroeconomic indicator Australia’s Current
Account that has noted a deficit amount of 2.1 USD in month of
Mar 2019, associated with a deficit of 4.5 USD bn in preceding
sector (CIEC, 2019).
Inflation In economics, inflation is a sustained has upsurge in the overall
price level of products and services in an economy in period. The
yearly inflation rate of Australia market fell to 1.3% in the first
quarter of 2019 from 1.8% in the preceding period as well as
missing market expectation of 1.5% (Australia Inflation Rate,
2019).
Inequality The inequality can be of different types but over here, the major
discussion is related to the inequality of income. The level of
Australia income is more inadequate than OECD average but
equivalent than the other countries who communicate in English
that includes UK and US as these countries are able to maintain
the high level of inequality (Douglas, 2015). In the research, this is
witnessed that inequality in Australia is continue to improve with
the average prosperity of uppermost 20% rose by 53% (to $2.9%
million) from the year 2003 to 2016 (Australian Council of Social
Service, 2018).
Exchange Rates In Australia, rate of exchange of currency between Australia and
other overseas currencies are major articulated in expressions of
Economics 5
the quantity of foreign currency that an Australian dollar will
purchase. It has been witnessed that Australian dollar has
decreased 0.0015 or 0.21% to approx. 0.6898 on Friday June 14
from 0.6913 in the previous session of trading (Trading
Economics, 2019). In the history, this has been found that
Australian Dollar has extended on 1.10 in July of 2011 that is
considered as the highest rise in the variance and value of Dollar
(Parliament of Australia, 2019). Further, the low record in
Australia has been witnessed on 0.48 in April in the year 2001.
Globalisation has affected these macroeconomic indicators
Globalisation in the Australian market leads to the increase in the knowledge as well as in the
advance technology that are essential to connect the people in world (Australian Institute of
International Affairs, 2016). In Australia, globalisation has created the impact on the
macroeconomic indicators of the country that are explained below –
Advantages
Improvement in national income
The Australia government aid program majorly emphasis on the growth of the economy, law as
well as the justice that improves the service delivery in the countries that are required. It allows
the company to the form the association with the other countries has improved the chances of
improvement in trade that is possible because of the effective implementation of the
globalisations (Baylis, Smith, and Owens, 2017). The improvement in the agreement and
the quantity of foreign currency that an Australian dollar will
purchase. It has been witnessed that Australian dollar has
decreased 0.0015 or 0.21% to approx. 0.6898 on Friday June 14
from 0.6913 in the previous session of trading (Trading
Economics, 2019). In the history, this has been found that
Australian Dollar has extended on 1.10 in July of 2011 that is
considered as the highest rise in the variance and value of Dollar
(Parliament of Australia, 2019). Further, the low record in
Australia has been witnessed on 0.48 in April in the year 2001.
Globalisation has affected these macroeconomic indicators
Globalisation in the Australian market leads to the increase in the knowledge as well as in the
advance technology that are essential to connect the people in world (Australian Institute of
International Affairs, 2016). In Australia, globalisation has created the impact on the
macroeconomic indicators of the country that are explained below –
Advantages
Improvement in national income
The Australia government aid program majorly emphasis on the growth of the economy, law as
well as the justice that improves the service delivery in the countries that are required. It allows
the company to the form the association with the other countries has improved the chances of
improvement in trade that is possible because of the effective implementation of the
globalisations (Baylis, Smith, and Owens, 2017). The improvement in the agreement and
Economics 6
political terms has led to increase in number of industries that further contributed in improving
the national income. This is clear with the image given below: -
(Source: Davies, 2017)
It has been found that national income of the Australia has been improved from 1965 to 2015,
which is clear from the impact. This is considered as one of the major advantage of globalisation
because it leads to rise in the national income.
Decline in unemployment rate
Globalisation has impact on the intermediate as it include the export of the natural products
which majorly include mineral, iron, beef and many others which has improved the job
opportunities.
Unemployment rate
political terms has led to increase in number of industries that further contributed in improving
the national income. This is clear with the image given below: -
(Source: Davies, 2017)
It has been found that national income of the Australia has been improved from 1965 to 2015,
which is clear from the impact. This is considered as one of the major advantage of globalisation
because it leads to rise in the national income.
Decline in unemployment rate
Globalisation has impact on the intermediate as it include the export of the natural products
which majorly include mineral, iron, beef and many others which has improved the job
opportunities.
Unemployment rate
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Economics 7
(Source: Trading Economics, 2019)
The rise in the exports has brought the improvement in the unemployment rate as there was
decline in the unemployment rate as more and more people got jobs, which is one of the major
advantages as it has contributed to the rise in the economy of Australia.
Improvement in exports
This has been found that the rise in the technology has brought rise in the exports by 32% from
the year 2009. Modern technology has allowed for a year of mining to travel across the
difference that is possible with improved technology (Livock and Richmond, 2019). The rise in
exports leads to high income as well as current account balance. Globalisation has brought
changes improvement in technology leads to increase that is clear with the graph given below: -
Exports of Australia
(Source: Trading Economics, 2019)
The rise in the exports has brought the improvement in the unemployment rate as there was
decline in the unemployment rate as more and more people got jobs, which is one of the major
advantages as it has contributed to the rise in the economy of Australia.
Improvement in exports
This has been found that the rise in the technology has brought rise in the exports by 32% from
the year 2009. Modern technology has allowed for a year of mining to travel across the
difference that is possible with improved technology (Livock and Richmond, 2019). The rise in
exports leads to high income as well as current account balance. Globalisation has brought
changes improvement in technology leads to increase that is clear with the graph given below: -
Exports of Australia
Economics 8
(Source: Trading Economics, 2019)
The graph given above show that Australia has tremendous increase in the growth of the exports
that is reflected with line graph. This improvement is possible with the rise in globalisation in
Australia that is considered as one of the major advantage of globalisation.
Disadvantages
Rise in income inequality
Globalisation major disadvantage include that it is not able to bring the improvement in the
income inequality within Australia due to rise in competition in the market. The country is still
dealing with the issue of inequality, as rich people are getting richer and poorer are becoming
poor in the economy (Dunne and Reus-Smit, 2017). The rise in competition has provided the
opportunity to the richer people to attain the high profit and has affected poor people. The below
given image reflects the trends of the disposable income of the people which is continue to
increase.
(Source: Trading Economics, 2019)
The graph given above show that Australia has tremendous increase in the growth of the exports
that is reflected with line graph. This improvement is possible with the rise in globalisation in
Australia that is considered as one of the major advantage of globalisation.
Disadvantages
Rise in income inequality
Globalisation major disadvantage include that it is not able to bring the improvement in the
income inequality within Australia due to rise in competition in the market. The country is still
dealing with the issue of inequality, as rich people are getting richer and poorer are becoming
poor in the economy (Dunne and Reus-Smit, 2017). The rise in competition has provided the
opportunity to the richer people to attain the high profit and has affected poor people. The below
given image reflects the trends of the disposable income of the people which is continue to
increase.
Economics 9
(Source: Australian Council of Social Service, 2018)
Affected manufacturing industry which affected current account balance
Further, it has been found globalisation has also affected the development of the country in the
adverse manner. The rise in the outsourcing performs the major role in the globalisation as in
Australia this leads to the movement of the business operations units and manufacturing plants in
overseas market where they can get cheap labour that helps them to earn high profits. Thus, this
affected the economy of the country and lead to the unemployment of the youth of Australia
working with manufacturing units (Australian Council of Social Service, 2018). Further, this
ultimately affected one of the major macroeconomics factor that is current account balance. This
is one of the major disadvantage of emergence of globalisation across the world.
(Source: Australian Council of Social Service, 2018)
Affected manufacturing industry which affected current account balance
Further, it has been found globalisation has also affected the development of the country in the
adverse manner. The rise in the outsourcing performs the major role in the globalisation as in
Australia this leads to the movement of the business operations units and manufacturing plants in
overseas market where they can get cheap labour that helps them to earn high profits. Thus, this
affected the economy of the country and lead to the unemployment of the youth of Australia
working with manufacturing units (Australian Council of Social Service, 2018). Further, this
ultimately affected one of the major macroeconomics factor that is current account balance. This
is one of the major disadvantage of emergence of globalisation across the world.
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Economics 10
Conclusion
In the end, this can be concluded that globalisation is beneficial for Australia as it allows them to
improve development. The macroeconomic indicators of the Australia has been discussed which
shows facts related to the economy of country. Further, it has been found that globalisation has
affected the macroeconomic factors as it has improved the performance of Australia. In the
analysis, this has been globalisation has also lead to the issue because the inequality in wealth of
people. It can be said that globalisation will be beneficial for this country’s future. Further, the
policy maker of country needs to bring the changes in their policy for the future improvement. It
is recommended to the government of Australia to take the initiative for managing the income
inequality within the country. The government needs to offer the job opportunities to different
people with the middle and lower income slab. Further, they should welcome the different
companies to engage the employees within the nation.
Conclusion
In the end, this can be concluded that globalisation is beneficial for Australia as it allows them to
improve development. The macroeconomic indicators of the Australia has been discussed which
shows facts related to the economy of country. Further, it has been found that globalisation has
affected the macroeconomic factors as it has improved the performance of Australia. In the
analysis, this has been globalisation has also lead to the issue because the inequality in wealth of
people. It can be said that globalisation will be beneficial for this country’s future. Further, the
policy maker of country needs to bring the changes in their policy for the future improvement. It
is recommended to the government of Australia to take the initiative for managing the income
inequality within the country. The government needs to offer the job opportunities to different
people with the middle and lower income slab. Further, they should welcome the different
companies to engage the employees within the nation.
Economics 11
References
Australian Council of Social Service (2018) Inequality In Australia 2018 [Online]. Available
from: https://www.acoss.org.au/wp-content/uploads/2018/07/Inequality-in-Australia-
2018_Factsheet.pdf [Accessed on 14th June 2019]
Australian Institute of International Affairs (2016) Australia and Globalisation [Online].
Available from: https://www.internationalaffairs.org.au/australianoutlook/ken-henry-australia-
and-globalisation/ [Accessed on 14th June 2019]
Baylis, J., Smith, S. and Owens, P. eds. (2017) The globalization of world politics: An
introduction to international relations. Oxford University Press.
CIEC (2019) Australia Current Account Balance [Online]. Available from:
https://www.ceicdata.com/en/indicator/australia/current-account-balance [Accessed on 14th June
2019]
Davies, R. (2017) FactCheck: What are the facts on Australia’s foreign aid spending? [Online].
Available from: https://theconversation.com/factcheck-what-are-the-facts-on-australias-foreign-
aid-spending-71146 [Accessed on 14th June 2019]
Douglas, R. (2015) Senate report on Australian inequality [Online]. Available from:
https://johnmenadue.com/robert-douglas-senate-report-on-australian-inequality/ [Accessed on
14th June 2019]
Dunne, T. and Reus-Smit, C. eds. (2017) The globalization of international society. Oxford
University Press.
References
Australian Council of Social Service (2018) Inequality In Australia 2018 [Online]. Available
from: https://www.acoss.org.au/wp-content/uploads/2018/07/Inequality-in-Australia-
2018_Factsheet.pdf [Accessed on 14th June 2019]
Australian Institute of International Affairs (2016) Australia and Globalisation [Online].
Available from: https://www.internationalaffairs.org.au/australianoutlook/ken-henry-australia-
and-globalisation/ [Accessed on 14th June 2019]
Baylis, J., Smith, S. and Owens, P. eds. (2017) The globalization of world politics: An
introduction to international relations. Oxford University Press.
CIEC (2019) Australia Current Account Balance [Online]. Available from:
https://www.ceicdata.com/en/indicator/australia/current-account-balance [Accessed on 14th June
2019]
Davies, R. (2017) FactCheck: What are the facts on Australia’s foreign aid spending? [Online].
Available from: https://theconversation.com/factcheck-what-are-the-facts-on-australias-foreign-
aid-spending-71146 [Accessed on 14th June 2019]
Douglas, R. (2015) Senate report on Australian inequality [Online]. Available from:
https://johnmenadue.com/robert-douglas-senate-report-on-australian-inequality/ [Accessed on
14th June 2019]
Dunne, T. and Reus-Smit, C. eds. (2017) The globalization of international society. Oxford
University Press.
Economics 12
Livock, C. and Richmond, Y. (2019) How has Australia significantly been affected by
globalization? A critical realist explanatory analysis. Journal of Critical Realism, pp.1-11.
Parliament of Australia (2019) Exchange Rates [Online]. Available from:
https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/
pubs/MSB/feature/Exchangerates [Accessed on 14th June 2019]
Shane, D. (2019) Australia’s unemployment rate holds steady in May [Online]. Available from:
https://www.ft.com/content/642568fc-8d7a-11e9-a1c1-51bf8f989972 [Accessed on 14th June
2019]
Trading Economics (2019) Australia Exports [Online]. Available from:
https://tradingeconomics.com/australia/exports [Accessed on 14th June 2019]
Trading Economics (2019) Australia Inflation Rate [Online]. Available from:
https://tradingeconomics.com/australia/inflation-cpi [Accessed on 14th June 2019]
Trading Economics (2019) Australian Dollar [Online]. Available from:
https://tradingeconomics.com/australia/currency [Accessed on 14th June 2019]
Trading Economics (2019) Unemployment [Online]. Available from:
https://tradingeconomics.com/australia/unemployment-rate [Accessed on 14th June 2019]
Livock, C. and Richmond, Y. (2019) How has Australia significantly been affected by
globalization? A critical realist explanatory analysis. Journal of Critical Realism, pp.1-11.
Parliament of Australia (2019) Exchange Rates [Online]. Available from:
https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/
pubs/MSB/feature/Exchangerates [Accessed on 14th June 2019]
Shane, D. (2019) Australia’s unemployment rate holds steady in May [Online]. Available from:
https://www.ft.com/content/642568fc-8d7a-11e9-a1c1-51bf8f989972 [Accessed on 14th June
2019]
Trading Economics (2019) Australia Exports [Online]. Available from:
https://tradingeconomics.com/australia/exports [Accessed on 14th June 2019]
Trading Economics (2019) Australia Inflation Rate [Online]. Available from:
https://tradingeconomics.com/australia/inflation-cpi [Accessed on 14th June 2019]
Trading Economics (2019) Australian Dollar [Online]. Available from:
https://tradingeconomics.com/australia/currency [Accessed on 14th June 2019]
Trading Economics (2019) Unemployment [Online]. Available from:
https://tradingeconomics.com/australia/unemployment-rate [Accessed on 14th June 2019]
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