Impact of Economic Globalization on Society and Policy Debates

This essay delves into the multifaceted impact of economic globalization, examining its influence on inequality, economic stability, economic sustainability, and the exercise of macroeconomic policy. The paper begins by defining economic globalization, which involves the global movement of goods, services, capital, information, and technology among nations. It then explores the implications of globalization, including its role in increasing inequality due to the capitalist market structure, impacting economic stability through interconnected economies, and influencing economic sustainability by affecting resource utilization. Furthermore, the essay analyzes the impact of globalization on macroeconomic policy, emphasizing the need for strategic public policies to mitigate negative consequences. The conclusion underscores the importance of understanding economic globalization in the modern world, highlighting its comprehensive effects on society and individual lives. The essay considers whether economic globalization should be restrained or promoted by public policy.

Running head: IMPACT OF ECONOMIC GLOBALIZATION
Impact of economic globalization
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Introduction
The world first embraced the concept of globalization towards the end of the twentieth
century. The end of the Cold War led to the downfall of the erstwhile Soviet Union who was a
strong proponent of the ideas of communism. However, this proved to be disastrous for the
liberal ideas of a capitalist market economy as advocated by the United States of America. As a
consequence, when the Soviet Union collapsed, the United States found it prudent to expand on
its theoretical framework and establish a globe where there would be imposition of an integrated
economic market based on capitalist ideals (Reader 2017). The purpose of this paper is to
understand the issue of economic globalization. In this sense, the paper tries to draw on the
issues of inequality, economic stability, economic sustainability and that of the exercise of
macroeconomic policy. The paper concludes with the analysis of the concept of globalization
and its relevance for the modern world.
Economic globalization
The aspect of economic globalization refers to the situation whereby there is a
widespread global movement of commodities, services, capital, information and technology. The
exchange of such aspects takes place amongst the various nation states of the world who have
opened up their territorial boundaries to the outside world (Samimi and Hashem 2014). The
domestic goods and services produced within these countries are exported to other countries
while they import the goods and services provides and manufactured by the other nation states of
the world. As a consequence, it can be observed that the aspect of economic globalization leads
to an increase in the economic integration of the world and the interdependence amongst the
countries. In this regard, it needs to be noted that the formation of the World Trade Organization

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has led to the rise in the issue of economic globalization. The organization has helped the various
countries to establish a common framework under which they can carry out international trade,
thereby minimizing the issues of conflict and animosity at the global level.
Impact of globalization on inequality
While the issue of economic globalization has been welcomed by most the countries of
the world as a result of giving the freedom to the private platters to pursue any course of action
as desired, it has several limitations (Mihajlović and Krželj–Čolović, 2014). For instance, one of
the most important limitation of economic globalization is that of inequality.
Under the capitalist form of market structure, the private firms across the world are
encouraged to follow their own path of functioning. They have the discretion to produce and
manufacture in accordance with their own wishes. The governments of the concerned nation
states would have an extremely minimal role in this regard and would not interfere in the
working of such firms.
In this regard, the issue of inequality started to rise in the society. The people who had the
resources and the ability to work could find remunerating employment opportunities. This helped
them to expand their finances more. They could afford a decent standard of living and could
accumulate more resources (Nikolova, Rodionov and Afanasyeva 2014). On the other hand,
there are certain people in the society without any resources available with them. They do not
have the ability or the opportunity to find remunerating employment opportunities and as a result
of this, they fail to afford a higher standard of living for themselves. This has led to the creation
of an unequal society in the world where there is a class difference which exists between the
‘haves’ and the ‘have nots’ (Nica, Manole and Potcovaru 2016).

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Impact of globalization on economic stability
One of the more important implications of economic globalization is that of economic
stability. The various economies of the world are found to be integrated in to one single whole
within the outfit of globalization. As a result of this, any changes in the economy of one region
of the world, has a consequent impact on the other regions of the world (Coulibaly, Erbao and
Mekongcho 2018). Many economic theorists have laid down the fact that the issue of welfare
rises as a result of economic globalization. The countries are no longer responsible for the
welfare of their citizens only, but for the citizens of the other parts of the world as well.
However, to this extent, there is a need to understand that when a particular economy faces a
decline for various reasons, it can have a resounding effect on the other regions of the world as
well (Borjas 2015). Thus, the issue of economic stability arising out of economic globalization is
debatable.
Impact of globalization on economic sustainability
Economic sustainability refers to the economic development of the present population
along with a hope for a sustainable future for the future generation as well. The main objective of
economic sustainability is that of meeting the required goals of human development (Beeson
2014). In this context, it needs to be noted that the development of the human population is
largely dependent on the financial resources available with them. For instance, when an
individual possess more financial resources, they have the ability to afford a decent standard of
living. However, while trying to attain a better standard of living for themselves, there is a need
on the part of the society to ensure that they use the natural resources of the Earth in a manner
which is sustainable for the future generation. In other words, they should not indulge in
mindless use and exploitation of the resources for their own development (Leitão 2014). In the

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context of globalization, this becomes essential as the private organizations needs to be careful in
their utilization of natural resources.
Impact of globalization on macroeconomic policy
The aspect of globalization has a significant impact on the issue of macroeconomic
policy as well. The state leaders of the world undertake their decisions and formulate their
policies keeping in mind that the entire globe is integrated from the economic dimension.
In this regard, it needs to be noted that the issue of globalization is necessary to be
promoted by the use of public policy. However, such policies need to be strategic in nature so as
to minimize the negative implications of globalization such as that of economic instability and
that of inequality (Suci, Asmara and Mulatsih, 2016). The individuals of the world needs to have
effective access to their basic means of survival. For instance, everyone should have access to
food, clothing and shelter which would help them to survive. To this extent, there is a need to
understand that it depends upon the government of the countries to play a facilitating role in the
sphere of establishing welfare for the citizens while trying not to interfere in the working of the
private firms.
Conclusion
In conclusion, it can be observed that the issue of economic globalization is essential to
understand in the present context of the twenty first century. The entire world has been integrated
in to a whole unit in to a global village where the economies of the nation states are found to be
interlinked and interconnected with each other. Furthermore, the interconnectedness of the
economies mean that their cultural outlook and the social standards of the states are also
dependent on each other. The paper has tried to understand the impact of economic globalization

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on the issues of inequality, economic stability, economic sustainability and that of the exercise of
macroeconomic policy. This has allowed in the comprehensive understanding of the impact of
economic globalization on the broader society and on the lives of the people.

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