Economic Globalization and Growth Dynamics
Summary
Economic globalisation denotes the intensification of cross-border economic activities through trade liberalisation, capital mobility and the diffusion of technology. It shapes growth trajectories by expanding markets, facilitating knowledge spillovers and deepening financial integration. However, the benefits are uneven: high-income and emerging economies often capitalise more on global linkages than low-income countries, owing to differences in institutional quality, infrastructure and human capital. Composite indices distinguish between de facto engagement (actual trade and investment flows) and de jure policies (tariffs, capital controls), revealing that trade openness and financial integration exert distinct influences on growth. Moreover, synchronisation with global business cycles can amplify growth in expansionary phases but heighten vulnerability during downturns. Recent global shocks—from the 2008 financial crisis to the COVID-19 pandemic—have underscored both the resilience afforded by diversified external ties and the risks of supply-chain disruptions. Ultimately, the dynamic interplay between policy frameworks and absorptive capacity determines whether globalisation translates into sustained economic growth and convergence of incomes.
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Economic Globalization and Growth Dynamics publication trend
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Technical terms
Economic Globalisation: The process of increasing economic interdependence across countries through trade liberalisation, capital flows and technology diffusion.
Globalisation Index: A composite measure quantifying the extent of a country’s integration with the global economy across economic, social and political dimensions.
Foreign Direct Investment (FDI): Cross-border investments where investors establish a lasting interest and control in enterprises operating in other economies.
Income Convergence: The narrowing of per capita income disparities among countries over time, often driven by integration into global markets.
References
- The KOF Globalisation Index – revisited. The Review of International Organizations (2019).
- Globalization and Economic Growth: Empirical Evidence on the Role of Complementarities. PLOS ONE (2014).
- Globalisation and economic growth in Africa: New evidence from the past two decades. South African Journal of Economic and Management Sciences (2022).
- The global distribution of gains from globalization. The Journal of Economic Inequality (2023).
- Economic convergence in a globalized world: The role of business cycle synchronization. PLOS ONE (2021).
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