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Paper Eater

1564 words - 7 pages

Economic globalization is the name given to the increasing economic interdependence of the countries of the world. In today’s world, many people do not take into consideration that their ability to buy vegetables and fruits, let alone buy them all year long, is related to economic globalization. This type of globalization has grown into what it is today through the introduction of many economic programs and relationships. Some of these economic programs include the establishment of new international monetary system developments, the creation of the World Bank and the international monetary fund, the expansion of free market economy and the impact of new technologies on money around the ...view middle of the document...

The World Bank consist of 184 member countries that are represented by a board of just 24 people, this organization an independent functioning division of United Nations. This economic institution aims to be a loan-providing agency for countries facing financial difficulty. However, for a country to receive a loan from the
World Bank, they must subdue to certain conditions, a practice that many criticize.
The World Bank and the international monetary fund were created to work together to encourage and stabilize economic activity. The international monetary fund’s role in this partnership was to monitor exchange rates and provide short-term assistance, while the World Bank was in charge of long-term assistance. Quotas, which are determined by their economy size, are paid by its member countries to fund the IMF. The United States pays the largest quota, followed by Japan and Germany, however their payments are significantly lower. The international monetary fund, which is also criticized by many, is a division of United Nations as the World Bank is.
The two most influential events in the efforts to drive economic globalization were World War II and the Cold War. The Cold War of 1989 was a war primarily fought by capitalist and communist countries due to conflicting economic ideas and practices. Communist countries, led by the Soviet Union, were run under a centrally planned government and capitalist countries such as the United States ran a free market economy. The growth of free market economy drew in countries like China, Russia, Poland and the east part of Germany, who looked at the American economy as an example and means for growth. There came a result that, not only brought many new countries to participate in new economic systems, but a new era for the global economy.
There were many global forces throughout history that have brought economic globalization to become what it is today, and one force that will continue to help the global economy grow is that of technology. In today’s world, picking up a phone to give someone a call from all corners of the Earth is easier than eve, but most people don’t associate this ability as a force that changes many aspects of the world. Everyday, millions of people are exposed to commercials and ads to encourage economic activity, which many do right in their own homes by investing in companies all over the world. With this ability, a pattern can be seen regarding ones investments in certain companies, for example, if an investor pulls out of a company, it leaves the other investors wondering if they too should in fact, pull out of the company. An effect such as this is known as the electronic herd effect because of the movement of investors like a herd of cattle.
The electronic herd effect can somewhat be applied to the influence of particular people in economics, if a person believes the theories of a powerful person they will “tie” themselves to said person, making them more universally known....

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