Globalization

            Due to improved technologies, reduced barriers to trade, and other reasons, the world is has and is becoming more and more globalized. As a result of this globalization, countries have become wealthier. Furthermore, we can conclude that globalization leads to higher national incomes. This is because globalization leads to lower prices for consumers, more job opportunities, the spread of technology, etc.

            Below is a spreadsheet showing the most gloabalized and least globalized countries and their national income per capita. The national income is represented per capita because this is the best way to show which country’s population is the richest and poorest. Just showing the total national income for the whole population doesn’t represent the country well because the country may have a very large population or there could be a few very wealthy people and a lot of poor people. For example, China has a very high total national income, but its national income per capita is relatively low.

The evidence in the table below proves that globalization does in fact lead to higher national incomes. The average national income per capita for the fifteen most globalized countries is about $30,400 and the average for the fifteen least gloablized countries is about $5,600. This is a huge difference in averages showing that the theory is true. Also, not one of the least globalized country’s national income per capita is higher than one of the most globalized, again proving that this economic theory is correct.

            There are many reasons why globalization leads to higher national incomes. The reason that has the greatest impact is the gains from trade among other countries. Comparative advantage is a huge part of why countries can gain from trade. Comparative advantage means that a country can produce products that it can make at the lowest cost to it. So, they produce a lot of these products and trade for everything else. This way of trading leads to lower prices for everyday goods, so consumers save money and become wealthier. 

Table of National Incomes Per Capita