Sunday, January 8, 2012

I have a question about globalization?

Globalization depends on gains from trade, otherwise it doesn't benefit anyone. Gains from trade are realized because different countries can produce different goods at different rates of efficiency (cost of producing some goods relative to the cost of producing other goods). These differences are influenced greatly by geographic considerations. For example, Southeast Asia can produce rice more efficiently than northern Europe because of geography and climate (and climate is influenced by geography). Geography determines the amount of natural resources a country has, which will influence which countries are exporters and which are importers. And as others have mentioned, geography influences the cost of shipping, which will impact the level of trade (access to transportation such as rivers, topography that can easily be used for highways and railroads, etc).

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