REPLY TO THE DISCUSSION RESPONSE!

The Harvard Business School defines globalization as "the increase in the flow of goods, services, capital, people, and ideas across international boundaries" (Cote, 2021). Globalization is a part of our daily lives with a multitude of multinational companies and an interconnected world economy. Globalization has several positives including creating opportunity. There are entire businesses and fields that exist due to globalization and the transfer of goods, services, capital, people, and ideas. It creates higher demand and allows businesses to expand their markets (Mourdoukoutas, 2021). One positive of globalization that relates to this course is the foreign exchange market. It allows market participants to benefit from arbitrage opportunities and businesses to hedge against foreign exchange rate volatility with forwards and options.

Unfortunately, globalization is has some downsides. One that we see often is the higher level of competition and imitation. This lowers the barrier to entry for firms and leaves pioneers of products to risk investing into a product that ends up being highly reproducible. This causes those companies to have little price control and less market domination. The international markets are highly integrated with domestic and local markets create cycles that drive income and employment globally. The Forbes article also showed the ugly side of globalization when countries try to get out of the global cycles and currency devalues or trade wars increase (Mourdoukoutas, 2021). This can break down the positives of globalization and harm the businesses and individuals participating in our global economy.