How globalization effects inflation ?
Globalization keeps Inflation Low. The reason is because globalization reduces the cost of production. As such, higher costs aren’t passed onto the consumer, thus sparking inflation. Case and Point, Computers. If Dell or HP made computers in US factories with parts all made in the United States, the average home computer might cost something like $5,000-$10,000. Since it is made in China, Taiwan, etc, its a much more affordable $500-$2,500. Thus leaving the consumer with extra money to spend else where in the economy. So not only does Globalization keep in inflation in check by reducing the cost of production, but it also creates wealth in developing countries which eventually will become consumers of those very same products. Thus increasing the marketplace for your goods. It is a Win-Win situation. …and yes, Globalization does cause “short-term” job loss in America. But “long-term” it actually creates more jobs. How? By reducing the cost of goods, more businesses are able to grow a
