ABSTRACT
Economic globalization has various impacts on economic growth, poverty reduction, and inequality through various channels. The impacts can be favorable or adverse to an economy, depending upon various conditions. The core of economic globalization is free and quick movement of human resources, goods, capital, and information across national borders. As a consequence, a new economic phenomenon in one place of the world almost instantaneously diff uses to other places of the world. In addition, integration of country markets under globalization increases the synchronization of business cycles among countries. The strength of an impact from the globalized world to an economy is diff erent depending upon the degree of openness of an economy. The openness is brought about by trade and capital liberalization, and by the adoption of a clean fl exible exchange rates system. Capital liberalization attracts foreign direct investment (FDI) and portfolio investment.
