Srejber: Globalisation is a positive process
At the Annual Meeting of the Euro Banking Association at Grand Hotel today, Second Deputy Governor Eva Srejber gave a talk on the topic of globalisation.
At the outset, she remarked that globalisation defined as the economic interdependence of countries worldwide is not a new phenomenon. Trade, for instance, has always been the foundation for countries’ ability to raise their prosperity.
"Most recently, international economic integration increased markedly in the 50 years before World War I when new markets were opened up for flows of capital and goods. At that time, capital flows from many European countries were even larger than today, relative to GDP. Sweden too benefited from these flows which helped us finance new infrastructure".
"The economic interdependence has been facilitated in the recent decades by a more rapid and widespread use of technology" said Eva Srejber.
"The benefits of globalisation are broadly similar to those of liberalisation and trade emphasised in classical economic theory. According to the principle of comparative advantage, individuals, like countries, prosper when they use their resources to concentrate on what they do well relative to others. In contributing to a greater international division of labour and a more efficient allocation of savings, globalisation raises productivity and thereby prosperity".
Eva Srejber also said: "While the whole world, developing as well as industrial countries, benefits from the process of globalisation, the gains are unlikely to be distributed even in the short run. Judging from recent developments, it seems to be that pressures from globalisation have magnified the benefits of good policies as well as the costs of bad policies. Countries that have embraced the implications of globalisation, that have liberalised trade, removed capital restrictions and addressed exchange rate imbalances – they have been the ones to benefit the most from this process".