http://ctv2.theglobeandmail.com/servlet/story/RTGAM.20090216.wjapanmarkets0216/business/Business/businessBN/ctv-business
Summary:
3.3% drop in Japan’s gross domestic produce has never been witnessed by the Japanese government. Since 35 years ago, Japan has never suffered from the gross domestic rate to shrink that fast. The reasoning behind this drop according to this article is that the global demand for exports have decreased; Japan’s economy relies heavily on exports, hence the contracting GDP value. Many Japanese companies were forced to cut jobs. This affected the unemployment rates greatly, as well as the market where fewer purchases were made by consumers. This will be Japan’s third consecutive GDP drop as stated by this article; Japan is officially in a recession.
Connection:
The connection between this article and our text book is the situation of demand-deficit unemployment. This means that workers are to be laid off due to the decreasing market demand of their product. In Japan, their GDP has declined for over three consecutive quarters now – declining through two consecutive quarters means a recession is going to take place. GDP measures the total goods and service value in the market in a given period of time. In Japan, they are experiencing declination of GDP meaning the goods and services they produce are not profitable and stable due to the fewer demand. The more a product is not wanted or not demanded, it corresponds to the decrease in unemployment and a weak economy.
Reflection:
The Japanese have one of the world’s largest exporting economies. Seeing that global demand of exported goods is not as high as before, I think the Japanese economy is going to suffer greatly if they continue to rely on exportations. Instead, I strongly believe the Japanese government should give out more jobs in the infrastructure industry seeing that the Japanese have a good communication industry and that the world still has demands for these networks. With more jobs created, people will have a source of income, and it helps limit the drop of unemployment rate. Moreover, if people have money then they will continue to purchase goods; this would aid in re-stimulating the market. Therefore, slowly but surely helping the Japanese economies recover from their recession.
Wednesday, February 25, 2009
Thursday, February 12, 2009
Chapter 4 Government in Canada
http://forum.canucks.com/lofiversion/index.php/t214430.html
Summary:
The article talks about the usage of equalization payment to help the provinces in need (the have-not provinces), and the effects it has on these provinces. For the first time in Canadian history, a sum of 347 million dollars will be received by Ontario through equalization payments. According to Jim Flaherty, finance minister, for Ontario to receive such a big amount of equalization payment shows how serious, unstable and unprofitable their economy is. Moreover, he states that Ontario is forced into economic hardship and will be receiving equalization payments for awhile because of the global economy crisis, unstable American dollar and their weak manufacturing industry. On the other hand, as of 2009, the most current report shows that British Columbia, Alberta and Saskatchewan do not receive these payments. Alberta is not affected by the economic crisis as much due to their oil industry. However, even Alberta is pushing for external assistance. Alberta and other richer provinces are asking for aid; this shows how serious the situation is.
Connection:
The connection between this article to our text book is the effect of the federalist system that Canada follows. Canada has equalization payments to make sure that different provinces have adequate revenues to offer reasonable and qualified service to their citizens. Usually, these payments of equalizations are only given to the Maritime Provinces because their economy is affected greatly since the Cod Fishery times. To show how much need of aid these Maritime Provinces are in, they are also given stabilization payments along with equalization payments to avoid declining of provincial tax revenue. Progressive taxation funds these equalization and stabilization programs, distributing the money to the weaker provinces. The weak American economy pulled the Canadian economy down as well, hence for the first time, a rich province like Ontario is giving external aid for equalization payments.
Reflection:
I have the same opinion as Jim Flaherty, finance minister. By putting out more job opportunities and encouraging more international trade, the Canadian economy will re-stimulate itself. I see equalization payments as a momentary solution to our weak economy. Ontario receiving external help through these payments in years to come, I believe, will give investors a sense of lost-faith because even our rich province is need of aid. If investors lose interest in investing in Canada then the economy will have a smaller chance of re-stimulating itself. This is a big dilemma for the Canadian Government. On one side, saving a rich provincial is necessary to save the Canadian economy in the long run. However, on the other side, by aiding rich provinces like Ontario shows the seriousness of the current problem in Canada to investors and international traders. Immediate actions should be taken right now, so Canada does not recess into a depression or else job losses and poverty will be hard to find a solution for.
Summary:
The article talks about the usage of equalization payment to help the provinces in need (the have-not provinces), and the effects it has on these provinces. For the first time in Canadian history, a sum of 347 million dollars will be received by Ontario through equalization payments. According to Jim Flaherty, finance minister, for Ontario to receive such a big amount of equalization payment shows how serious, unstable and unprofitable their economy is. Moreover, he states that Ontario is forced into economic hardship and will be receiving equalization payments for awhile because of the global economy crisis, unstable American dollar and their weak manufacturing industry. On the other hand, as of 2009, the most current report shows that British Columbia, Alberta and Saskatchewan do not receive these payments. Alberta is not affected by the economic crisis as much due to their oil industry. However, even Alberta is pushing for external assistance. Alberta and other richer provinces are asking for aid; this shows how serious the situation is.
Connection:
The connection between this article to our text book is the effect of the federalist system that Canada follows. Canada has equalization payments to make sure that different provinces have adequate revenues to offer reasonable and qualified service to their citizens. Usually, these payments of equalizations are only given to the Maritime Provinces because their economy is affected greatly since the Cod Fishery times. To show how much need of aid these Maritime Provinces are in, they are also given stabilization payments along with equalization payments to avoid declining of provincial tax revenue. Progressive taxation funds these equalization and stabilization programs, distributing the money to the weaker provinces. The weak American economy pulled the Canadian economy down as well, hence for the first time, a rich province like Ontario is giving external aid for equalization payments.
Reflection:
I have the same opinion as Jim Flaherty, finance minister. By putting out more job opportunities and encouraging more international trade, the Canadian economy will re-stimulate itself. I see equalization payments as a momentary solution to our weak economy. Ontario receiving external help through these payments in years to come, I believe, will give investors a sense of lost-faith because even our rich province is need of aid. If investors lose interest in investing in Canada then the economy will have a smaller chance of re-stimulating itself. This is a big dilemma for the Canadian Government. On one side, saving a rich provincial is necessary to save the Canadian economy in the long run. However, on the other side, by aiding rich provinces like Ontario shows the seriousness of the current problem in Canada to investors and international traders. Immediate actions should be taken right now, so Canada does not recess into a depression or else job losses and poverty will be hard to find a solution for.
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