Aspects of Globalization

The author deals with the costs and benefits of globalisation. He also gives a simple explanation of the core economic forces behind the globalisation. The current technical development favours the decline of the fixed coordination costs of the multinational enterprises and this opens up the possibility for the enterprise to utilize the lower marginal costs elsewhere on the globe. The optimal degree of globalisation depends on the interplay between the fixed coordination costs and local marginal costs. Even though globalisation brings also costs in addition to benefits, the critics should remember, that any structural economic change tends to cause adjustment costs.