Sample Research Paper on Globalization Vs Nationalism

Research Paper: Globalization Vs. Nationalism

The IMF After 2015

            The international monetary fund and the World Bank were set up in 1944 at a conference that was convened in Brenton Woods, New Hampshire. The mandate of these two organizations was to promote international economic cooperation that would lead to a stable and prosperous global economy. However, the work of the IMF and World Bank has continued to evolve as a result of the changing economic and financial realities in the world. The IMF has the chief function of promoting monetary cooperation by providing policy advice and capacity development support to promote the economies of counties (International Monetary Fund, 2016). Additionally, this institution grants loans to countries to assist them in financing and designing of policy programs. Up to 2015, the IMF and World Bank had concerned themselves with large-scale poverty reduction, which would culminate in the attainment of the Millennium Development Goals (MDGs). Nevertheless, in 2015, the two institutions replaced the MDGs with Sustainable Development Goals (SDGs) under the 2030 Global Development Agenda.

The organizations are now making new initiatives to support the member countries reach their respective SDGs. It is mainly done with improved support for the developing countries to come up with strong tax systems and the G-20 Compact with Africa because the majority of the countries in Africa are either developing or underdeveloped, with heavy international debts and a deficit in the balance of trade. The IMF, in collaboration with the African Development Bank, is working to promote private investments in the African countries. Essentially, the Global Economic Crisis that took place in 2008 revealed an inherent weakness in the IMF regarding its ability to prevent economic disasters (International Monetary Fund, 2016). Since then, the institution has been working hard to reform its lending policies and programs to ensure that such an event does not occur again in the future. Some of the changes have taken place since then include the creation of crisis firewall, stepping up of crisis lending, helping the world’s poorest countries by revising policies, sharpening of the institution’s analysis and policy advice, and reforming IMF’s governance.

Par Value Then and Now

            Par value is the nominal amount money or capital that is put into the corporation by each share of the stocks issued by a company when it was originally issued. The statement of the par value was very important for investors considering the securities of a particular corporation, as it assured them that no other investor would land a better deal if they bought the original shares afterward. Additionally, it was essential when there were no regulations in the securities market and played the role of protecting both the shareholders and creditors from possible losses in case the business failed. In the present, however, the concept of par value and its application have been rendered irrelevant because the regulations in place have replaced the role that the par value used to play.

Determination of the Currency Rate and Exchange Rate by Five Countries

Unites States

In the US the exchange rates are affected indirectly by the government because they are determined at the open foreign exchange market. There are various tools used by the US government to influence the exchange rate of the dollar against foreign currencies. Among them is the independent Federal Reserve that raises or lowers the fed funds rate. The fed funds rate directly affect the level of interest rates throughout the US banking system. They also affect the supply of money in the market (Kurasawa, 2016). The effects are either the raising or lowering of the strength of the dollar relative to the currency of other countries. Another tool used by the American government is the Treasury Department. The said department can print more money, increase the supply and in the process weaken the dollar. It can also borrow money from other countries thus increasing debt and pushing the value of the dollar down. Fiscal Policy can also be used to either weaken or strengthen the dollar, depending on whether it is expansionary or otherwise. The support of the IMF was essential in making recommendations to the US government during the global credit crunch that occurred in 2008.


Unlike most countries in the world, the Chinese government actively controls the exchange rate of the Yuan as opposed to letting it float freely against others in the market.  The government of China fixed its exchange rate in 1995, pegging it at slightly more than 8 Yuan per dollar. It was pegged against the dollar because the US is China’s largest trading partner combined with the fact that the dollar is the most common currency in the world (Dixon, Zhang & Dai, 2016). Pegging is then used by other countries to determine the exchange rate of their currencies to Yuan. This exchange rate was maintained up to 2005 when the government liberalized its currency policy by introducing a narrow trading band that increased gradually up to +/-2% in March 2014. In 2015, the country took an unprecedented step by allowing the Yuan to devalue beyond the trading band that had been held rigidly earlier on. The country has strict rules when dealing with institutions and individuals that have foreign currency. They are forced to sell the foreign currency to China’s central bank that then proceeds to print local currency to be used by businesses, individuals, and banks. The foreign currency, the majority of which is in the form of dollars, is incorporated into the country’s foreign reserves. China has been a beneficiary of the IMF in terms of policy support for public investment and expansionary credit. These have boosted the economic growth of china.


Japan is a manufacturing country that relies heavily on exports. It is, therefore, in the interest of the country to keep the value of the yen low and its exports cheap in the world market. The government of Japan does this by selling more yen in the foreign exchange market, pushing the value of the yen down. In the event of a trading partner such as the unites states having abnormally low-interest rates, the value of the dollar is likely to weaken relative to the Yen. The Japanese do not want that (Kurasawa, 2016). Therefore, the Japanese resort to buying the US Treasury bonds in volumes to prevent the Yen from appreciating against the dollar or any other foreign currency. These and other foreign exchange interventions are practiced in Japan to ensure that the Yen has a low value, creating a wider market for the Japanese exports which are deemed cheaper than products from other countries. Japan and IMF have been working together for more than 60 years. The organization has helped in capacity building to drive the economic growth of the Asian region.


Just like the United States, the foreign exchange of the Indian rupee is dependent on the supply and demand forces in the global foreign exchange market. An increase in the demand for dollars in India has the effect of increasing the value of dollar compare to that of the rupee. In the same manner, an oversupply of dollars in the foreign exchange market is likely to weaken the dollar compared to the rupee (Dhasmana, 2016). Given that the exchange rate of the Indian currency is dependent on outside forces, some steps can be taken by the Indian government to regulate the exchange rate of the rupee, though indirectly. These include fiscal policies that take place within the economy of that country. India is a frequent user of the resources provided by IMF. For example, financial support from the IMF assisted India in overcoming the balance of payments it experienced in 1981-82 period.


Brazil is one of the countries that have sought to replace the US dollar dominance in the world market. In the recent times, the country has experienced political instabilities, and these have contributed to the weakening of Brazil’s currency. The country’s real’s value is pegged on the positive developments of the country’s political landscape and decisions made by the US government that in effect affect the value of the US dollar (Reiss, 2014). The government of Brazil is often hands-off in the determination of the exchange rate of the Brazilian real, making it rely on the open global foreign exchange market. IMF supports the Brazilian economic endeavors. Since 2015, the country has been facing economic recession, and IMF has been instrumental in supporting it in terms of economic and fiscal policies.

Globalization vs. Nationalism

            Globalization refers to the interconnection of the economies and communication between various countries. It has resulted in the form of a global economy and culture, such that what happens in one country can be felt other countries in far geographical areas. Indeed, the said interdependence of the financial systems and cultures became apparent during the global recession that took place in 2008. The financial crunch took place in America, but its effects were felt in other geographical regions, such as Europe and even China. On the contrary, nationalism is the opposite of globalization (Knott, 2017). In essence, it tries to protect the economies of individual countries by having protective trade policies.

Nationalism political ideology holds that a country should govern itself without any influence from outside forces and without being forced to rely on or cooperate with others. It is very much related to the notion of self-determination or a republic. In extreme cases, nationalism prescribed that the citizens of a nation should have control over the government and all the resources and means of production. An example of nationalism at play is when a country refuses to admit import products from foreign countries in order to support the local producers.

Debate on Globalization vs. Nationalism

Argument for Globalization

Proponent 1: I believe that Globalization has the potential to make the world a better place by improving the economies of the developing countries and thus putting them at a level playing field as they compete for market and resources with the industrialized nations. The phenomenon pushes for free trade through the reduction of barriers to trade such as taxes, tariffs, and subsidies. The free trade can promote global economic growth, create more jobs, make companies more competitive than before and lower the prices for the consumers (Collins, 2015).

Proponent 2: Thanks to globalization, Labor can move from country to country to market their skills. Sharing technology with developing nations, which is enabled by globalization, can help them to progress at a faster rate than would be the case if left on their own. Transnational companies are investing and installing plants in other countries to provide employment and services to the local populations. Countries have also been given an opportunity to participate in free trade agreements.

Proponent 1: I agree that the movement of labor has been made possible by globalization, but it has also led to brain drain in the poorer countries and contributed to unemployment in the developed nations, case in point being the US and the Asian countries where wages are unbelievably low.

Proponent 2: It is true that globalization has leveled the playing field in terms of market, but the effect has not been all that positive. The barriers to entry into the market have been raised for small enterprises as a result of the established corporations enjoying the benefits of scale.

Argument for Nationalism

Supporter 1: The reason why I support nationalism is that it makes possible to protect the interests of the citizens of a country both economically and socially without external influence or interference. Free market as advocated for by globalization has cost many emerging countries that are yet to have the capacity for the scales of trade regarding production that globalization demands.

Supporter 2: I am of the opinion that Nationalism protects countries such as the United States from the loss of job opportunities as in the case whereby American firms have relocated their services to the Asian countries where the cost of labor is meager (Collins, 2015). The multinationals in the developing nations are accused of causing environment and social injustices, which could not happen if there was nationalism in such countries.

Supporter 1: I support nationalism because it protects the identity and cultures of the nation, which are fast becoming diluted by globalization.

Supporter 2: In as much as I support nationalism, I believe that it should be implemented in a prudent manner to prevent the stagnation of a nation in terms of technology and knowledge.





Collins, M. (2015). The Pros and Cons Of Globalization. Forbes. Retrieved from

Dhasmana, A. (2016). Exchange Rate Uncertainty and Employment Dynamics: Evidence from India. SSRN Electronic Journal.  Retrieved from

Dixon, R., Zhang, Z., & Dai, Y. (2016). Exchange Rate Flexibility in China: Measurement, Regime Shifts and Driving Forces of Change. Review Of International Economics24(5), 875-892. Retrieved from

International Monetary Fund. (2016). Euro Area Policies: Selected Issues. IMF Staff Country Reports16(220), 1. Retrieved from

Knott, E. (2017). Nationalism and belonging: introduction. Nations And Nationalism23(2), 220-226. Retrieved from

Kurasawa, K. (2016). Policy Uncertainty and Foreign Exchange Rates: The Dcc-Garch Model of The Us / Japanese Foreign Exchange RATE. International Journal Of Economic SciencesV(4).  Retrieved from

Reiss, D. (2014). Invoice Currency in Brazil. SSRN Electronic Journal.