Economics: Macro and Micro Environmental Trends

Table of Contents


The last few decades have been considered as the age of information revolution following the revolution of technology that has facilitated the interconnectivity of all countries in the world. This interconnectivity has resulted to globalization of trade where firms have been forced to compete at a global level. It has also necessitated the rapid emergence of transnational and multinational corporations, whose immense power has been a significant influence on the political, economic and social trends in international economies. The globalization of trade has been attributed to macro forces that have been the drivers to making the world a global village.

These global trends have had significant effects, both positive and negative to the economic growth and development of both the developed and the developing countries (Simmons, Dobbin and Garrett, 2008, p. 4). Indeed, the emerging markets of Southeast Asia are a testimony of the level of contribution that global trends have had on international economies. In addition, these global trends have had effect on national policies, politics and strategies in such a way that it is difficult to make micro-decisions without incorporating the perspectives of the macro forces. Moreover, the effect of macro forces can be seen on the environmental management, financial markets, infrastructural developments, migration and immigration and wealth distribution among others. This paper will analyze and discuss the effects of global trends in macro forces on the national trends.


The degree of interconnectedness of global trends and national trends can be found by looking at the independent variables and dependent variables within the international economy. The independent variables have had a great impact on international transaction costs resulting to convenient financial flows in the international trade (Keohane and Milner, 1996, p. 26). For instance, cross-border transport costs have reduced significantly over the last few years following the modernization of land modes of transport and the growth of air transport. Infrastructural advancement through latest communication technology has reduced logistical costs as well as liberalization of financial markets leading to efficient transaction costs. In addition, flexible government policies in the international economies have facilitated the efficiency of production through efficient monetary policies and flexible trade barriers that allow participating nations to enjoy economies of scale in the international market.

The current global trends have had an effect on the global environmental management. The dominance of some powerful nations or transnational enterprises on the international economy has been major contribution to the degradation of the environment where the individual economies and especially the third world countries have little or no authority on environmental management. According to Bissio (2009, p. 4) lack of sufficient information has led the local communities to be more concerned of their immediate convenience in expense of their future welfare as well as natural and socio-cultural transformations. However, the latest campaign of sustainable development has led to national economies embracing policies that have positive effect on their local issues both now and in the future. Even though, the of greenhouse effect on global warming is an issue that is universally experienced and is beyond national control (Schneider, 1990, p. 197)

The globalization of financial markets has led to volatility of monetary policies, instantaneous transaction completion and internationalization of money markets. The effect of this on national economies is inability to control the financial markets as well as stabilization of national currencies and other financial instruments. Modernization of financial market is making it difficult for the individual national economies to make policies that alienate external influence. For instance, when France decided to act independently of global economy, it experience monetary problems resulting from devaluation of its currency, franc (Allen, 1999, p. 111)

Global trends have eased logistics with people being able to move freely around the world at the least time possible. Modern air transport coupled with advanced ground travel has made the national economies reap heavily from tourism as well as from import and export market. The ultimate effect of this international interaction is diversity at the national level and economic breakthrough (Lewis, 2003). Indeed, Power (2000, p. 152) claims that elimination of barriers and advanced technology will bring about intercultural exchange and interdependence; however, there is a possibility of emergence of global imperialism with one culture assuming dominance over others.

Agriculture has been the mainstay for many world economies for a long time. Globalization has seen the deviation from traditional farming methods to commercially inspired agriculture. In addition, The Shift of Land (para. 1) points that modern agricultural practices have facilitated the introduction of genetically modified crops with short lifespan and high yield thus having a direct influence on national policymaking (more so a step forward towards alleviating poverty). The effect of these genetically modified crops is the elimination of indigenous crops which many national economies are reluctant to relinquish, although some countries like India have embraced the trend commonly referred to as green revolution. However, there has been debate that globalization of agriculture has caused exploitation of the less developed countries by the mega-rich economies who tend to control the global food production. Moreover, the global trend of rural-urban migration or urbanization has influenced reduction in food production and increased poverty levels especially in developing countries Aron and Patz, 2001, p. 121).

Global social contracts have emerged following the advancement of information technology. In addition, the struggle for supremacy in the global society has led to various forms of warfare both combatant and noncombatant. This has spread even further to the national borders where there have emerged micro-violent groups (Mazarr, 1999, p154); an example being the Somalia Pirates and the Tamil Tigers Militia. The ultimate effect of this is eroded political stability at the national level as dictated by the global economy. Moreover social vices including criminal activities have gone and are expected to go even more hi-tech, with contraband, financial fraud and smuggling taking the center stage.

In the last few years, migration and immigration have been witnessed especially in form of labor mobility. There has been widespread immigration to developed countries by people from poor or developing countries as they seek employment opportunities (Grantham, Ware and Williamson, 2007, p. 95). This trend has had and will still have effect on the national economies whereby, the developed countries experience a burst of competition in the job market while the poor nations will experience shortage of skilled manpower due to brain drain. On the other hand, as the world population keeps growing, the developed countries have a lower birth rate, better health care facilities and therefore higher life expectancy. However, industrialization in the developing nations will positively influence reduction in unemployment and youth bulge (National Intelligence Council para. 7).


The skewed resource endowment between nations has not been made better by the global trends. Transnational enterprises tend to control the global market and despite fostering growth in developing countries, the magnitude of repatriation of funds and asymmetrical wages has made the gap between the rich and the poor even wider (Ackerman, Tufts University. Global Development and Environment Institute, 2000, p. 307). Moreover, the rich will always have a higher quality and healthy life as they will be able to fight disease and have healthy eating. A clear example of this disparity as explained by National Intelligence Council (2008) can be seen in sub-Saharan Africa where the population is more vulnerable to diseases while it is expected that the region will still lag behind economically, experience population stress, internal conflicts and instability. On the other hand, as Patel (para. 1) claims, the dominance of global economy has had a direct effect on national economy as was witnessed recently in global recession that affected even the smallest national economy in the world.

Works Cited

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