What are some of the impacts of a global market?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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According to economic theory, global markets will result in an increase in total production by the combined economies of the world.  There may well be difficulties for specific groups of people in certain countries, but the overall impact will to increase production.

As markets become globalized, there will be competition between firms from various countries.  This will lead firms from all the various countries to specialize in goods and services for which their country has a comparative advantage.  When this happens, total production will increase since all countries will be making the things they are best at.

Of course, there will be problems along the way.  We can see this with manufacturing workers in the developed world.  They are being outcompeted by workers in less developed countries.  However, economists argue that these problems are outweighed by the overall benefits of the global market.

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