Firstly, the self-creativity of one dominant state’s economy and the adaptability of global economic changes are laborious to retain permanent, which means there would appear a newly political environment and then damage the hegemon. In other words, as other states grow more powerful, their aspirations, reputation and the dissatisfaction of the status grow as well. As Schweller and Pu (2011) demonstrated, when the competitors arise enough, the system become fluctuation. The rapidly growing states are generally more conceivable to the threat to the hegemon and international allies. Secondly, to sustain the cost that supply for the common goods, the economic surplus of leadership decreased gradually, even been using up.
He asserts that there has been a worrying trend in economic inequality in the US and deterioration in the intergenerational mobility (Carter, 2013). He notes that the level of inequality in wealth and income in America has reached the highest levels historically and is higher while compared to that of other industrialized countries. Indeed, the mission of the author in the text is to make clear how the economy reached here. Since the situation is detrimental, measures should be taken to change the situation. The greater inequality is linked to a slowdown in the economic growth, the risk of political instability, and greater economic instability.
Dependency theory believes that the reason why developing countries are poor is because of developed countries. The process of industrialization and modernization has made the richer rich and the poorer poor and the gap between the rich and the poor remains. This is because Dependency theory argues that, the rich countries depend on materials and resources from poor countries and they exploit the small or developing countries. In fact, without the under-developed and developing countries, there is no development in the developed countries because the rich countries are well developed in the expense of the already poor countries. The Dependency theory also argues that rich or western countries cannot be compared to under-developed and developing countries in terms of tradition and customs, because they have far different cultures and
The protesters claim that globalization is bad for poor people in poor countries. A large body of evidence, however, suggests the opposite—though clearly globalization can result in unsettling experiences for many who live in the developing world. But it absolutely a good way for developing countries’ improving. (WEB Carol Graham) recent research with Nancy Birdsall and Stefano Pettinato suggests that globalization has brought substantial benefits and opportunities for upward mobility for many low-income individuals in the emerging economies. Yet these same opportunities entail new vulnerabilities and new risks for others.
Effects of income inequality The impact of economic inequality affects a large part of the population in different ways. The most obvious effects of wealth inequality are that it creates social classes. The first subdivision that we can draw is that population is split in two categories: the rich and the poor. There are a variety of economic effects caused by income inequality. Wealthy people have a higher income and consequently spend less of each marginal dollar, which caused the economic growth to slow.
Factors effecting business cycle Employment At times of high unemployment, factories are underutilized, output is lowered and the economy can suffer to the point of recession. Conversely, low unemployment can result in higher productivity and an improved economy. Employment is just one variable, and its effect should be considered in conjunction with others. Roger Leroy Miller, author of “Economics Today,” reminds us that technological innovation can displace workers and increase unemployment, but it can also result in an increase in output. Inflation Inflation occurs when the average prices of goods and services rise.
Globalisation has been perceived as a solution to reduce income inequality across the globe. This could be explained by improvements in infrastructures and communications, which allow the developing countries to close the gap with the richer developed countries. Moreover, the theory of comparative advantage also supports this stand. However, the article suggested that despite this supposedly positive global phenomenon, inequality has instead worsened within many developing countries. One possible explanation to this issue could be the problem of outsourcing, where there is a distinctive difference with regards to the rise in productivity between the skilled and unskilled workers.
Unemployment is a chronic problem of our society, which hinders the progress of the population and places limits on the economic development of the country. In recent years there has been an increase in the rate of unemployment in El Salvador, which is alarming, since it impedes improving the living conditions of society. This is a problem that must be treated from the root, to be able to diminish its effects. In this context, a solution is proposed based on the study of aggregate demand, which was analyzed by Keynesianism. In order to reduce the unemployment rate, it is possible to bet on increasing the aggregate demand, for which the intervention of the State through the expansive fiscal policy is necessary.
Efficiency is concerned with the optimal production and distribution of these scarce resources. For an economy or organisation to be competitive an importance needs to be placed on achieving economic efficiency. The introduction of corruption, however, creates economic inefficiency. It does so by raising the marginal tax rate of firms, decrease business activity, raise the marginal costs of public funds, make certain government projects economically unviable, and undo the government’s ability to correct externalities, leading to inefficient outcomes. (Olken & Pande, 2012) Corruption in south Africa has lead to many significant economic losses.
This phenomenon has various advantages and disadvantages depending on our concerns. This paper presents the effects globalization on developing nations, with the focus on the issues: economic state, health system and education. Globalization has benefited the economy of many developing countries, their economy is growing and flourishing. But these processes are progressing slowly so that they cannot keep up with developed countries and the income inequality is rising. Organizations such as WHO, NGO and Doctors Without Borders, which emerged in the process of globalization, opened new possibilities to increase the overall life expectancy and living standards in developing countries by trying to eliminate diseases and provide education.