[MUSIC]
In this course we've looked at globalization as a phenomenon in
the world.
And we've identified different facets of globalization, which are the free movement
of capital, the free movement of goods and services, the free movement of people.
We've explored all of these aspects.
Capital a little bit less, with exchange rates and
with the balance of payments we've included some concerns about capital.
But we've talked quite in detail about trade and
about the movement of people, and we come to the place,
through all of this discussion, where we must conclude that trade and
migration are beneficial to both sides.
In other words, trade and migration are a win-win situation for both countries
engaged in trade, for both countries engaged in the movement of people.
And it's very difficult to argue with those conclusions.
So this is the first bottom line that we want to establish.
And as we've seen, as incomes, as trade increases,
the world benefits from more efficient use of its scarce resources.
The world benefits from countries being able to specialize in what they do best.
Both countries engaged in trade gain consumer surplus and currencies,
if they're traded freely,
should reflect the different productive advantages among nations.
We've seen that often countries interfere with this but
in general, if currency markets are free,
they should reflect something that has to do with the patterns of trade.
Now another point that's important to keep in mind,
we haven't spent much time on this, but it's true that when we think of
globalization, either currencies or trade, there are nations that don't play fair.
Sometimes currencies are manipulated.
Sometimes industries are subsidized.
Sometimes there are barriers placed to the movement of goods and
services to protect the domestic industry to give them an artificial advantage.
And this is the reason that we created the WTO, and
some of these other trading arrangements that we talked about in the trade section.
Because we need sort of a level playing field.
We need a system of rules that everybody has to obey, some sanctions, so that trade
can really be free and that we can truly see countries advantages being reflected.
And therefore, everyone benefits from real differences in efficiency.