The paper "The Impact of Globalization on Economies" is a perfect example of a term paper on macro and microeconomics. The entire world is functioning as a single unit due to the integration of goods, services, knowledge, and culture which should have benefitted economies and helped them to move ahead. Instead, it has been witnessed that despite economically backward countries having high economic resources are unable to match the unprecedented growth rate witnessed by USA & Western Europe which is due to imbalance which exists in the system and has resulted in certain economies showing different results.
This paper thereby looks to analyze the manner in which globalization has affected different economies differently and has resulted in different benefits and growth for each. This helps us to understand globalization and before moving ahead it is important to understand what it actually means. Various new definitions have been found but the one which is most accepted by people is that globalization relates to the movement of people, goods, capital, and ideas between different economies so that all economies around the world can witness growth and integrate together and work towards the betterment of the society (Globalization, 2012).
This has not been the case in the real world scenario as developed economies like the USA and Western Europe have exploited the poor and developing economies and used their resources towards the economic benefit of their own country instead of the whole society. This has created differences and resulted in widespread imbalances between world economies. This can be clearly seen by the fact that the USA and Western Europe have moved forward as globalization has increased both the exports and borrowed funds for the country (Globalization, 2012).
This has impacted the disposable income and has resulted in spread inequity as the poor economies like Kenya and African countries had to suffer. This has created a significant difference as abundant of labor in the African countries is exploited by developing counties through lower wages and has created wage differentials which have thereby impacted the manner in which benefits instead of spreading to different nations have been diluted. There has been some impact on the globalization of European countries as well.
This is due to the fact that the working boomers are aging and are provided with huge retirement bonuses and packages at the cost of the present working class. This has resulted in wage differentials as the present class of employees are not compensated properly and has increased the bunden of the financial exchequer of the economy (Hartmann, 2010). This has thereby affected the foreign exchange state and has pushed the economy slightly backward but still, they are able to take advantage of the economic resources of other countries and ensure growth for their region. This has thereby resulted in the development of neoliberal policies in the world economies and has totally changed the manner in which economies work as they look towards their own benefit (Quiggin, 2000).
This has resulted in the creation of inequity among the nations which is clearly visible by the growth rates posed by developed economies that have scarce resources in comparison to the poor and developing economies who have vast resources but show a poor growth rate. Thus the manner in which the wealth is shared among the nations has been affected and has resulted in economies gaining at the cost of others (Quiggin, 2000).
The development of new liberal policies has resulted in creating differences where the poor and developed economies having the resources have not been able to grow as the developed economies like the US and Western Europe. The world economies due to globalization and development of nonliberal policies, as a result, have overshadowed the manner in which the economies could have benefitted and have created differences and made look towards each other with suspicion (Thorsen & Lie, 2012).
This makes it important that the world bodies realize the fact that the manner in which unequal imbalance has been created around the world is addressed and a remedial solution to this overmounting problem is identified so that the economies are able to integrate and move forward. The manner in which globalization has affected the business can be seen from the fact that Europe which imports around 60% of its products from poor and developing countries is due to the fact that the resources available in those countries can be expolited at a lower cost (Fukuyuma, 2009).
This is primarily for the fact that poor and developing countries are not able to provide the society the basic necessities of life i. e. food and shelter which has resulted in the developing countries exploiting them and paying lower wages. This ensures that the products are available at a lower cost leading towards the economic growth of one country at the cost of others. It has been identified that the American culture is somewhat different where people look towards wearing Levis, watching CNN and drinking coffee at Starbucks (Wasserstrom, 2003) as the economic level and disposable income of the people has increased.
This has been due to the fact that they are able to lead and provide direction to the underdeveloped country and look towards using their resources for their benefit instead of mutual benefit. This can be seen in Abeokuta in West Africa where the local people followed western education without knowing that it was getting influenced by British power which gradually transformed the culture (Akande, 2002). This created a stance where the outer factors were able to influence them and used their economic resources for their benefit and further deprived the economic conditions of the people.
This has thereby created mass inequity and differentials in the manner the benefits are passed on. This has thereby created widespread differences between the developed economies like the USA & Europe and other developing economies resulting in job losses and others benefitting as a result. This is primarily the case within African & Asian countries as the rapid growth in population and widespread unemployment has made people work at a much lower rate (Colebatch, 2004). Thus, globalization has resulted in creating differences between the economies as developed countries look towards exploiting the underdeveloped countries by using their ample resources to their advantage.
Also, the fact that the developed countries are able to influence the underdeveloped countries has resulted in the creation of inequity and has totally affected the manner in which the economies work leading towards inequity and unrest among all.