Global Financial Markets
John Stiglitz argues that the current form of globalization has led to accelerated economic growth but that it has had negative side-effects particularly for emerging economies and poorer nations. Critically assess Stiglitz’s analysis and provide a reasoned argument either agreeing with his position or disagreeing with it. Whatever position you take should be based on both a strong theoretical argument as well as be supported by data drawn from a set of countries.
“I believe that globalization—the removal of barriers to free trade and the closer integration of national economies—can be a force for good and that it has the potential to enrich everyone in the world, particularly the poor. But I also believe that if this is to be the case, the way globalization has been managed, including . . . the policies that have been imposed on developing countries . . . need to be radically rethought.” (Stliglitz, 2002)
Introduction
Globalization technically refers to international integration. In its current form, it has been led by the Washington Consensus, with a neo-liberal economic motivation propagating that the “world is not a zero-sum struggle... but rather is a positive-sum” (Sachs, 2005) benefitting all countries involved. Stiglitz argues that emerging economies and poorer nation have largely seen the negative effects of globalization (Stiglitz 2002, 2006). These include poor growth, increased income inequalities, increased poverty and crony capitalism.
This paper will present an assessment of his views with regards to ‘Global Financial Markets’ , and their negative side-effects to emerging markets. It will start with a brief history leading to present day globalisation in developing countries. Thereaf ...