Mastering IELTS Writing Task 2: Sample Essays and Analysis on Economic Globalization’s Impact on Stock Markets

Economic globalization and its effects on stock markets is a topic that has appeared in IELTS Writing Task 2 exams with moderate frequency. Based on past trends, it’s likely to continue being a relevant subject for future tests. Let’s explore this theme through a sample question and multiple essay responses at different band levels.

Some people think that economic globalization has a negative impact on local and national stock markets. To what extent do you agree or disagree with this opinion?

Analysis of the Question

This question asks for your opinion on the impact of economic globalization on local and national stock markets. It’s important to note that:

1. The question presents a specific viewpoint (negative impact)
2. You need to state your level of agreement or disagreement
3. You should discuss both local and national stock markets
4. You must support your opinion with relevant examples and explanations

Sample Essay 1 (Band 8-9)

Economic globalization, characterized by increased international trade and investment, has undoubtedly transformed stock markets worldwide. While some argue that this phenomenon negatively affects local and national stock exchanges, I largely disagree with this view. I believe that globalization, despite presenting certain challenges, ultimately brings more benefits than drawbacks to stock markets at both local and national levels.

Firstly, economic globalization expands investment opportunities for local and national stock markets. As borders become more permeable to capital flows, domestic companies gain access to a broader pool of international investors. This increased liquidity can lead to higher stock valuations and more robust trading volumes, benefiting both the companies listed and the overall market. For instance, emerging markets like India and Brazil have seen significant growth in their stock exchanges due to increased foreign investment facilitated by globalization.

Secondly, globalization encourages greater efficiency and competitiveness in stock markets. As markets become more interconnected, there is pressure to adopt international best practices in areas such as transparency, corporate governance, and regulatory standards. This evolution enhances the credibility and attractiveness of local and national stock markets to both domestic and foreign investors. The transformation of stock exchanges in countries like China and South Korea over the past few decades exemplifies this positive impact of globalization.

However, it is important to acknowledge that economic globalization can pose challenges to local and national stock markets. Increased global interconnectedness means that these markets become more susceptible to international economic shocks and volatility. The 2008 global financial crisis, which rapidly spread across borders, demonstrated this vulnerability. Additionally, smaller local exchanges may struggle to compete with larger, more established global markets for listings and investment.

Nevertheless, I believe that the benefits of economic globalization outweigh these potential drawbacks. The increased access to capital, improved market practices, and opportunities for diversification that globalization brings can strengthen local and national stock markets in the long term. Moreover, as markets become more sophisticated, they can develop mechanisms to better manage global risks and volatility.

In conclusion, while economic globalization presents both opportunities and challenges for local and national stock markets, its overall impact is largely positive. By embracing globalization while implementing appropriate safeguards, these markets can harness its benefits to become more robust, efficient, and attractive to investors worldwide.

(Word count: 377)

Economic globalization's impact on stock markets

Explanation of Band 8-9 Score

This essay demonstrates the characteristics of a high band score (8-9) for several reasons:

1. Task Response: The essay fully addresses all parts of the task, presenting a clear position that is consistently developed throughout.

2. Coherence and Cohesion: The ideas are logically organized with clear progression. Each paragraph has a central topic, and ideas are well-linked both within and between paragraphs.

3. Lexical Resource: The essay uses a wide range of vocabulary with very natural and sophisticated control of lexical features. Key terms related to the topic are used accurately (e.g., “liquidity,” “corporate governance,” “economic shocks”).

4. Grammatical Range and Accuracy: It displays a wide range of structures with full flexibility and accuracy. Complex sentences are used effectively, and there are no noticeable errors.

5. Development of Ideas: Each main point is well-developed with relevant examples and explanations, showing in-depth understanding of the topic.

Sample Essay 2 (Band 6-7)

In today’s world, economic globalization has become a big topic, especially when talking about stock markets. Some people think it has a bad effect on local and national stock markets, but I partly disagree with this idea.

On one hand, economic globalization can bring some problems to local and national stock markets. When economies are connected globally, problems in one country can quickly spread to others. For example, during the 2008 financial crisis, many countries’ stock markets went down because of problems that started in the United States. Also, big international companies might take attention away from smaller local businesses in the stock market.

However, I believe globalization can also be good for stock markets. It allows more people from different countries to invest in local and national markets. This can bring more money into these markets and help them grow. For instance, many developing countries have seen their stock markets improve because foreign investors are interested in them. Globalization also encourages countries to make their stock markets better and follow international rules, which can make them more trustworthy.

Another benefit is that globalization gives investors more choices. They can put their money in different countries, which can help them reduce risk. This is good for both the investors and the stock markets because it can lead to more stable investments.

In conclusion, while economic globalization can cause some problems for local and national stock markets, I think the benefits are greater. It brings more opportunities for growth and improvement. However, countries need to be careful and have good rules to protect their markets from global risks.

(Word count: 273)

Explanation of Band 6-7 Score

This essay demonstrates characteristics of a Band 6-7 score:

1. Task Response: The essay addresses the main parts of the task and presents a clear position, though the development of ideas is less thorough than in the Band 8-9 essay.

2. Coherence and Cohesion: There is a clear overall progression, but the linking of ideas could be more sophisticated. Paragraphing is logical.

3. Lexical Resource: The essay uses an adequate range of vocabulary, with some attempts at less common words. However, the language is less precise and varied compared to the higher band essay.

4. Grammatical Range and Accuracy: A mix of simple and complex sentence forms is used, with generally good control. There are no major errors that impede communication.

5. Development of Ideas: Main points are supported with relevant ideas and examples, but the depth of explanation and argumentation is less than in the higher band essay.

Key Vocabulary to Remember

1. Economic globalization (noun) – /ˌiːkəˈnɒmɪk ˌɡləʊbəlaɪˈzeɪʃən/ – The increasing interdependence of world economies due to growing cross-border trade and investment flows.

2. Stock market (noun) – /stɒk ˈmɑːkɪt/ – A place where shares of publicly held companies are issued and traded.

3. Liquidity (noun) – /lɪˈkwɪdəti/ – The ease with which assets can be converted into cash without affecting their market price.

4. Volatility (noun) – /ˌvɒləˈtɪləti/ – A measure of the frequency and severity of price movements in a market.

5. Corporate governance (noun) – /ˈkɔːpərət ˈɡʌvənəns/ – The system of rules, practices, and processes by which a company is directed and controlled.

6. Diversification (noun) – /daɪˌvɜːsɪfɪˈkeɪʃən/ – The practice of spreading investments among different assets to reduce risk.

7. Capital flows (noun) – /ˈkæpɪtl fləʊz/ – The movement of money for the purpose of investment, trade or business production.

8. Emerging markets (noun) – /ɪˈmɜːdʒɪŋ ˈmɑːkɪts/ – Developing countries that are becoming more engaged with global markets as they grow.

Key vocabulary for IELTS Writing Task 2

In conclusion, the topic of economic globalization’s effects on stock markets is a complex one that requires careful analysis and balanced argumentation. When tackling such questions in IELTS Writing Task 2, it’s crucial to present a clear position, support your ideas with relevant examples, and demonstrate a good command of topic-specific vocabulary and grammatical structures.

For further practice, consider writing an essay on related topics such as:

1. The role of government regulation in global financial markets
2. The impact of technological advancements on stock trading
3. The pros and cons of foreign direct investment for developing economies

Remember to focus on clear organization, varied vocabulary, and accurate grammar. You can share your practice essays in the comments section for feedback and discussion. Good luck with your IELTS preparation!

How does quantitative easing affect the stock market is another interesting topic related to economic policies and their impact on financial markets. Understanding such concepts can enhance your ability to discuss complex economic issues in your IELTS Writing Task 2 essays.