Impact of Globalization on Macroeconomics

Technological progress is a key driver of improvements in incomes and standards of living. But new knowledge and technologies do not necessarily develop everywhere and at the same time. Therefore, the way technology spreads across countries is central to how global growth is generated and shared across countries.

Free Trade Agreements are a set of rules and procedures negotiated by two or more countries that establish a tariff-free trade zone. Countries in an FTA can export goods to any participating country without paying tariffs. These agreements also typically encourage cross-country business, such as the construction of factories in one country and the processing of goods in another.

Globalization can increase wage inequality in a relatively rich country by increasing the imports of manufactured goods using predominantly low-skilled labor from developing countries.

Due to globalisation, jobs in higher-cost economies have been lost as a result of the movement of manufacturing activities to nations with lower labour costs. Particularly noticeable examples of this trend are found in the textile industries, automobile production industries, and electronics industries.

Globalisation leads to the rise of uniform culture known as cultural homogenization i.e. the influence of western culture. 3. The differences among powers remain the same despite the exchange of cultures. Hence it may be said that cultural exchange is only one of many processes.

Globalisation stimulates economic activities, including an increase in transport services, an increase in production, and an increase in consumption of commodities and services, resulting in the scale effect, which causes environmental degradation