During the last decades international goods markets have become more integrated part of a
phenomenon summarised as Globalisation. Cross-border goods trade has intensified enormously
accompanied by a rise in offshoring of production into other countries. At the same time the
volatility of key macroeconomic variables has become more stable a phenomenon known as Great
Moderation. Variability of economic growth and inflation rates has declined significantly. The
coincidence with regard to their timing stimulates questions whether and how both phenomena are
related. Through this thesis the author introduces theoretical explanations and revises
empirical results achieved up to now. Globalisation in economic terms can be defined as
international integration of goods and factor markets. International integration of factor
markets can imply different input factors of production such as capital and labour. Although
globalisation in the sense of goods trade and financial flows has risen strikingly other
markets are still to a large degree national. There seems to be no will in industrialised
countries to foster international integration of labour markets and lift restrictive
immigration policies diametrically opposed to pressure on developing countries for
uncontrolled trade and capital policies. Macroeconomic volatility can refer to several
macroeconomic aggregates such as output and its components prices and employment. Volatility
can be measured in various ways such as standard deviation or variation coefficient.
