Question

Does the globalization of the world's economy which includes the globalization of the monetary system by way of the IMF improve or harm the world's economies?

Answer 1

Globalization has had a widespread effect for many years. The positive effects of globalization include the creation of human capital that it has brought about as now multinationals are outsourcing a lot of their work to employees in the developing countries. This has created a larger knowledge base and it has created also a wider pool of people that companies can now choose from. The globalization of the monetary system has now meant that monetary policy is now formulated by central banks with external factors in mind and so there is a certain level of standardization in monetary policy too. The problem with globalization has also been that there has been a loss of jobs in developed countries as most of these have been shifted abroad to low cost alternatives. This is a major flaw of the globalization agenda. But in general globalization has been succesful.