A Study On Australian Globalization Economics Essay

A Study On Australian Globalization Economics actThe effects of Globalization be manifold, affecting various aspects of the institution delivery to bring about overall financial betterment. The impact of Globalization exerts severe influence on the financial condition as well as the industrial sector of a particular nation. Globalization creates markets based on industrial productions across the world. This in turn, widens the access to a diverse smorgasbord of foreign commodities for consumption of the customers, owing to the marketing strategies undertaken by divergent corporations. Economywatch.com introduces that In the world economic arna, Globalization facilitates the formation of a common ecumenic market, on the basis of the liberal exchange of both cash and kinds. planetaryisation has largely well-beinged the Australian frugality. As Australia has an abundance of indwelling resources that our whole commonwealth cannot use, the extra surplus is sold to other cou ntries that hold back a posit for the resources, giving us a world market of over 6.5 million people. Skwirk.com states that Australia As a country with a st adequate judicature and square revenue, globalisation, in many an(prenominal) ship mode, has been positive. Australia has not fallen into the cycle of debt that many exploitation nations have suffered, nor have we been adversely affected by bad investments. Australias loyal economy has therefore been strengthened during the globalisation time.An planetary parcel out hypothesis can be seen as a measure to address problems in a country which has high unemployment, inflation or a lightheaded macro economy. One internationalist share possibility is known as mercantilism, and this theory suggests that a government can improve its economic welfare for the country by increasing exports and reducing imports. Two of the other master(prenominal) dole out theories are known as absolute skilful and proportional adva ntage. If a country has an absolute advantage over its trading partners, it is able to produce more of a good or service with the aforesaid(prenominal) 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. According 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 quite a little 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 labour force will focus on labour intensive goods, and countries with more capital wil l focus on producing goods that are capital intensive.Economywatch.com states that The benefits of international occupation have been the major drivers of festering for the last half 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 combat and takes advantage of international trade technology. An improver in sales and profit can be do through international trade and an extend sales potential of the active products is created. In an international trade market, the ability to maintain cost competitiveness in a domestic market is achievable and the potential to lard a business is enhanced. There is a reduce in habituation on existing markets in spite of appearance the global trade scene and a stabilisation of seasonal market fluctuations can also be achieved.A government may choose to intervene in international trade largely based on the fact of wanting to change the parcelling of resources and achieve what they perceive to be an improvement in economic and friendly 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 encumbrance are to correct for market failure, to achieve a more equitable dissemination of income and wealth and to improve the performance of the economy. There are many ways in which intervention can take place these include government legislation and regulation, the direct state provision of goods and services, the fiscal policy intervention and an intervention designed to close the breeding gap.Regulation can be used to introduce fresh competition into a market whereas the state funding can be used to provide goods and services and human beings goods directly to the population. Th e fiscal policy can be used to transfer the level of demand for different products and also the pattern of demand 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 reject the growth of domestic industries and excessive exports may cause quick depletion of natural resources of a country. Global trade may create economic habituation which may threaten political independence and in the case of intensive competition, exports may lead to rivalry among nations. Also, Soumya Singh believes that too much dependence on imports may undermine the economy of a country and developed cou ntries may economically exploit the underdeveloped countries that are dependent on international trade for their 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 bring up the global economy and support the idea of globalisation.SourcesKaleem, A, 2005, International Trade Theories online. ready(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-tr ade/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