On January 20th, 2010, there was an article on Reuters.com about Japan's suffering economy. Throughout the whole world, times are tough as there are many people without work. Therefore, the government of Japan is warning that deflation is inevitable. Every nation is trying to improve from the world-wide recession that threatens people's lives. Japan, so far, has been lucky as they crept out of the recession during the second quarter in 2009. However, because their recovery can easily be broken, deflation and recent job losses may disrupt their recovery. Therefore, the government is in negotiations with the Bank of Japan in order to come up with an answer to conquer deflation. Because consumers' demands are decreasing for goods that are wanted due to deflation, it will definately weaken companies' profits. The people are skeptical by waiting until things go further down in price before they buy them. All in all, capital spending has been reaching an all-time low, which is bad news for the economy.
My reflection on this article is that it somewhat reminds me of the lecture about opportunity cost in Macroeconomics. The Japanese people are choosing to spend their hard-earned dollars on food instead of the latest gadgets, hoping they will come down in price. Therefore, the gadgets are the opportunity cost. However, the people should start spending their money on goods, because if they don't, it might halt the economy all together, so that people might lose jobs again. Sometimes, waiting for goods to go down in price is often a long extended wait because businesses will not lower prices unless it comes in their benefit. People should start spending their money to help out the economy recover.
Kajimoto, T. (2010). Japan govt warns of deflation, sticks to economy view. Reuters: US Edition. Retrieved on January 22, 2010 from http://reuters.com/article/idUSTKB00666920100120
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I thought your post was articulated and written well. I liked the reflection paragraph at the end, because you not only gave facts, but gave your opinion on the countries economic issues.
ReplyDeleteI agree with your reflection pertaining to opportunity cost and the concept of pumping money back into the economy; however, I imagine it can be difficult to convince yourself to spend money on luxury items during a time of recession. It doesn’t surprise me that the Japanese managed to liberate themselves from the recession later on in the year due to the fact they seem to manufacture and modify close to everything on the market. I researched my country’s (Finland) International Monetary Fund statistics from April 2009 and in the process saw Japan at the top second to the United States worth approximately 4.9 trillion. Japan certainly is a force in the global economy. If you want to check out the cite it’s http://www.worldsrichestcountries.com/. Anyways, good post it was very informative and your reflection was a great way to sum up the topics in your discussion.
ReplyDeleteJapan is a powerhouse of manufacturing and international trade.But they lack in eployee protection and free trade structure, making business very hard to conduct within her borders. They have faced an international recession because their economy relies so heavily on exportation and foriegn market trading. I like your writing style and I will be back to check out your writings.
ReplyDeleteI'm glad someone picked Japan for their blog, it's a facinating country. I have long heard that the cost of living in Japan is EXTREMELY high, and that families try to offset this by having as many members as possible all live together. Parents, grandparents, children, cousins, aunts, uncles, etc. I have also heard that because Japanese families are so willing to forgo what Americans would consider "comforts of living" that they have more money to pump into retail markets. It'll be interesting to learn exactly how this economy functions.
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