A Study On Australian Globalization Economics Essay

A Study On Australian Globalization Economics EssayThe effects of Globalization be manifold, affecting various aspects of the world rescue to bring about overall financial betterment. The impact of Globalization exerts intense influence on the financial condition as well as the industrial sector of a particular nation. Globalization creates commercializes based on industrial businesss across the world. This in turn, widens the access to a diverse variety of foreign commodities for outgo of the customers, owing to the marketing strategies undertaken by different corporations. Economywatch.com states that In the world economic arena, Globalization facilitates the formation of a common worldwide market, on the basis of the self-aggrandizing exchange of both cash and kinds.Globalisation has largely benefited the Australian economy. As Australia has an abundance of natural resources that our whole population cannot use, the extra surplus is sold to opposite countries that have a de mand for the resources, giving us a world market of over 6.5 billion people. Skwirk.com states that Australia As a agricultural with a inactive government and substantial revenue, globalisation, in many an(prenominal) ways, has been positive. Australia has not fallen into the cycle of debt that many developing nations have suffered, nor have we been adversely affected by problematic investments. Australias strong economy has therefore been strengthened during the globalization time.An transnational dispense system can be seen as a measure to address problems in a country which has high unemployment, inflation or a weak macro economy. One international trade theory is known as mercantilism, and this theory suggests that a government can improve its economic well-being for the country by increasing exports and reducing imports. Two of the other main trade theories are known as absolute advantage and comparative degree advantage. If a country has an absolute advantage over its t rading partners, it is able to produce more of a good or service with the same amount of resources or the same amount of a good or service with fewer resources, whereas a country that has a comparative advantage in the production of a good or service, produces it at a lower opportunity cost than its trading partners. accord to Ahsan Kaleem, The theory of comparative costs argues that it is better for a country that is inefficient at producing a good or service to specialise in the production of that good it is least inefficient at, compared with producing other goods.Another important trade theory known as the factor endowment theory, strongly supplements the theory of comparative advantage by bringing consideration to the endowment and cost of factors of production. The theory states that countries with a big agitate force will focus on labour intensive goods, and countries with more capital will focus on producing goods that are capital intensive.Economywatch.com states that The benefits of international trade have been the major drivers of growth for the last half(prenominal) of the 20th century and nations with strong international trade have become prosperous and have the power to control the world economy. There are a few more important benefits of international trade, one of which is the fact that it enhances the domestic competitiveness and takes advantage of international trade technology. An increase in sales and lolly can be made through international trade and an extend sales potential of the existing products is created. In an international trade market, the ability to assign cost competitiveness in a domestic market is achievable and the potential to expand a business is enhanced. There is a reduce in dependence on existing markets within the global trade scene and a stabilisation of seasonal market fluctuations can also be carry throughd.A government may choose to intervene in international trade largely based on the fact of wanting to chan ge the allotment of resources and achieve what they perceive to be an improvement in economic and social welfare. Geoff Riley states that all governments of every political persuasion intervene in the economy to influence the allocation of scarce resources among competing users. The main reasons for policy intervention are to correct for market failure, to achieve a more equitable distribution of income and wealth and to improve the motion of the economy. There are many ways in which intervention can take place these include government legislation and regulation, the direct state supplying of goods and services, the fiscal policy intervention and an intervention designed to close the nurture gap.Regulation can be use to introduce fresh competition into a market whereas the state funding can be used to provide goods and services and public goods directly to the population. The fiscal policy can be used to alter the level of demand for different products and also the pattern of de mand within the economy. Market failure often results from consumers suffering from a lack of information about the costs and benefits of the products available in the market. Through government action, and increase in information to help consumers and producers value the true cost and benefit of a good or service can be found.The global trade system can have a variety of different implications if it is not conducted in the correct manner. International trade may discourage the growth of domestic industries and excessive exports may cause quick depletion of natural resources of a country. Global trade may create economic dependence which may threaten political independence and in the case of intense competition, exports may lead to rivalry among nations. Also, Soumya Singh believes that withal much dependence on imports may undermine the economy of a country and developed countries may economically exploit the underdeveloped countries that are helpless on international trade for t heir economic development.The globalisation of markets and the development of the global economy have had a definite impact on both the international and Australian economies. There are many benefits to be gained through international trade however, if it is not conducted in the correct manner, there could also be many implications. Through the various trade theories and government intervention, the most effective way for each country to be involved within the international trade market can be utilised, and as a result, can boost the global economy and support the idea of globalisation.SourcesKaleem, A, 2005, International muckle Theories online. visible(prenominal) from http//bizeco.blogspot.com.au/2005/06/international-trade-theories.html September 2012Economywatch.com, 2010, Benefits of International Trade online. Available from http//www.economywatch.com/international-trade/benefit.html September 2012Economywatch.com, 2010, Effects of Globalization online. Available from http/ /www.economywatch.com/economics-theory/globalization/effects.html September 2012Riley, G, 2006, Government Intervention in the Market online. Available from http//tutor2u.net/economics/revision-notes/as-marketfailure-government-intervention-2.html September 2012Singh, S, 2012, What are the Disadvantages of Foreign Trade? online. Available from http//www.preservearticles.com/2012022923900/what-are-the-disadvantages-of-foreign-trade.html September 2012skwirk.com, 2012, Globalisation in Australia online. Available from http//www.skwirk.com/p-c_s-57_u-507_t-1374_c-5292/globalisation-in-australia/qld/sose-geography/the-global-citizen-ecology-and-economy/globalisation September 2012