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Globalization and its Correlation to Free Trade

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When considering these variables, it may be discovered that a country may have a what is known as a comparative advantage.   The author goes on to say that a comparative advantage compares ratios between two products in the two countries and analyzes the gains from a country that may be more efficient at producing both products from specialization and trade (6).     This specific model of comparative trade is known as the Ricardo model of comparative advantage and has been refuted by several twentieth-century economists. Although absolute and comparative advantages are fundamental principles in the process of trading goods/services abroad, free trade induces the net benefits and promotes economic development.   Globalization is the wave of the future.   International economic integration has challenged countries to optimize production.   Products/services that are made inferior directly adversely impact that country opening the gate of global competition.   Inefficient workforce and poor quality produced products are now not only detrimental to the survival of that company but negatively impacts the country as a whole. The world has gone hi-tech.   The innovation of the internet has connected the world through the world wide web.   The ever rapid evolution of technology has created a boom in the purchase of cars, computers and electronics and has created a seriously competitive world.   According to Andrew Glyn, author of Capitalism Unleashed Finance Globalization and Welfare,   suggests in Chapter 4, Globalization and International Economic Relations, that a nation must produce well in order to live well (78).   If a rich country such as the United States of America desires to continue to hold its powerful eminence then that country will have to produce well or their standard of living will pay the penalty.   For instance, The United States of America was once home to the largest automotive manufacturers.   Global competition has pierced this acknowledgment and now Japan's Toyota presence is immense.

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preview essay on Globalization and its Correlation to Free Trade
  • Pages: 10 (2500 words)
  • Document Type: Essay
  • Subject: Management
  • Level: Undergraduate
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