Michael D. Bordo, Professor of Economics and Director of the Center for Monetary and Financial History at Rutgers University, says, in Globalization in Historical Perspective (2002), says globalization has become a buzzword of the new millennium. Indeed the term globalization is now part of our current language and globalization is nowadays probably the most widely used word: politicians, journalists and others such as firm managers or even ordinary people often use the word. Globalization has been one of the most hotly debated topics in international economics over the past few years. So it is clear that it is a phenomenon that is the subject of numerous comments or analysis. The term is used in a lot of different contexts, but in contemporary jargon it principally refers to economic globalization.
[...] Conclusion Today's globalization and globalization a hundred years ago present both ressemblances and differences. So as it is true to say that they different, it is also true to say that they are not completely different. The first thing to note is that historical backgrounds and political contexts were absolutely not the same. The first wave of globalization occurred without anyone trying to make it happen, (just like if it was destined to occur) contrary to the second one, that was entirely intentional and backed up by governments and institutions. [...]
[...] Whereas capital mobility was previously greater for long term investment, today it is greater for short term investment Labour The first wave of globalization was a period of massive voluntary migration. People mainly fled from Europe to the United States, Australia and Latin America because during the decades before 1914, Europe was experiencing a lot of farm crisis, because, because of trade, prices collapsed, and these countries were offering a lot of opportunities for those fleeing people. Famers had no choice but to migrate if they did not want to suffer or die. [...]
[...] The trilemma arises because a macroeconomic policy regime can include at most two elements of the “inconsistent trinity” of three policy goals: full freedom of cross-border capital movements; a fixed (or managed) exchange rate and an independent monetary policy oriented toward domestic objectives.” (Obstfeld and Taylor, 2002) 2 The first wave A hundred years ago, the world was quite all poor and agrarian. Governments provided quite no help to the farmers. Well-placed large farmers could benefit from a few supportive trade policies and farmers could get some very minor subsidies. [...]
[...] However whith the breaking out of the two World War, interventionist policies were used again, and people had to wait until the end of World War II, for the process to start again The second wave In this era of globalization (since 1973), there is, just like for the first wave, a real openness for trade. We can even say that the world we are living in is a world characterized by high levels of trade partly because of the presence today of multinal firms that have largely contributed to the rise of production and trade. [...]
[...] And so the question is: Do we witness exactly the same globalization for those two periods, or is today's globalization different from globalization a hundred years ago? As it is clear that globalization is not a new phenomenon, it is also important to underline the fact that it is false to say that there is nothing new in the globalization area we are living through. Regarding globalization, it is important to have a good definition of it. Here we want to compare two waves of globalization. [...]
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