Chapter 11: Globalisation of the World Economy: Potential Benefits and Costs and a Net Assessment
Michael D. Intriligator1 INTRODUCTION AND PURPOSE Globalisation is a powerful real aspect of the new world system, and it represents one of the most influential forces in determining the future course of the planet. It has manifold dimensions: economic, political, security, environmental, health, social, cultural, and others. The focus here will be on the concept of ‘globalisation’ as applied to the world economy. The term was coined in the 1980s, but the concept is an old one that has different interpretations to different people. Partly as a result of these different interpretations, there are very different reactions to ‘globalisation’ with some policymakers, scholars, and activists seeing it as a force for advancing the world economy while others, again all three, seeing it as a serious danger to the world economic system. (For the former, supporting globalisation, see International Monetary Fund 1997; Ohmae 1990; International Monetary Fund 2002; Friedman 2000; Micklethwait and Wooldridge 2000; World Bank 2002. For the latter, opposing globalisation, see Greider 1997; Rodrik 1997; Bauman 2000; Gray 2000; Giddens 2000; Hutton and Giddens 2000; Hertz 2001; Bhagwati 2001; Stiglitz 2002; and Sullivan 2002. See also Salvatore (ed) 2004 and Gangopadhyay and Chatterji (eds) 2005 for further discussions of globalisation). There are three purposes of this chapter. First, it will clarify the notion of ‘globalisation’ as applied to the world economy. Second, it will evaluate both the potential benefits and the potential costs stemming from globalisation. Third, it will consider how the costs or dangers stemming from globalisation could...
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