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Globalization of the World Economy: Potential Benefits and Costs and a Net Assessment by Michael D. Intriligator * Mailing Address: Michael D. Intriligator Department of Economics University of California, Los Angeles Los Angeles, CA 90095-1477 Telephone: 310-825-4144 Fax: 310-825-9528 E-mail: intriligator@ Paper prepared in Microsoft WORD 1 Globalization of the World Economy: Potential Benefits and Costs and a Net Assessment by Michael D. Intriligator Introduction and Purpose Globalization is a powerful real aspect of the new world system, and it represents one of the most influential forces in determining the future course of the planet. It has manifold dimensions: economic, political, security, environmental, health, social, cultural, and others. The focus here will be on the concept of globalization as applied to the world economy. The term was coined in the 1980’s, but the concept is an old one that has different interpretations to different people. Partly as a result of these different interpretations, there are very different reactions to globalization, with some policymakers, scholars, and activists seeing it as a force for advancing the world economy while others, again all three, seeing it as a serious danger to the world economic system. (For the former, supporting globalization, see International Monetary Fund, 1997; Ohmae, 1990; International Monetary Fund Staff, 2000; Friedman, 2000; Micklethwait and Wooldridge, 200