With global economic growth slowing and inequality rising, the case against globalisation is strengthening - Edexcel - A-Level Economics A - Question 8 - 2022 - Paper 2

Countries can specialize in producing goods where they have a comparative advantage, which boosts global output. This specialization allows economies to increase efficiency and productivity, benefiting from the working efficiencies of focused industries.

Globalisation can significantly benefit developing countries through foreign direct investment (FDI). Multinational corporations (MNCs) often establish operations in these countries, creating jobs and fostering economic growth in export industries.

With firms competing globally, consumer prices may fall as companies innovate to remain competitive. This increased competition can lead to greater choices and lower prices for consumers worldwide.

As supply chains become more integrated due to globalisation, the increased supply of goods can help keep prices stable, reducing the risk of inflation on a global scale.

The rise of MNCs symbolizes the effects of globalisation, as they operate across various countries, bringing innovations, skills, and investment that can further drive economic growth.

However, the likelihood of growing protectionism could restrict global trade and limit the benefits brought about by comparative advantage, potentially leading to trade wars and reduced access to markets.

Over-reliance on imports might encourage countries to neglect domestic production. This could weaken local economies and lead to vulnerability in case of global supply chain disruptions.

Globalisation might lead to structural unemployment in developed countries, particularly if industries move abroad to capitalize on lower labour costs, creating social and economic challenges.

Additionally, the increase in goods transport across the globe can lead to increased pollution, raising concerns about environmental sustainability and prompting calls for stronger regulations.