Saturday, February 22, 2020

Economic growth of Japan after 1945 Term Paper Example | Topics and Well Written Essays - 1750 words

Economic growth of Japan after 1945 - Term Paper Example The net national savings (NNS) of an economy is calculated from the difference between its gross national savings (GNS) and the rate of depreciation of the capital stock of the economy (Depr). NNS= GNS – Depr. Figure 2: Falling Savings in Japan over Time (Source: â€Å"World Bank†) In the above line diagram, the pink line clearly shows the fall in the net national savings rate in Japan over time. The real interest rate is the rate of interest which is experienced by an investor in the market after compensating for the loss from inflation. The real interest rate (R) is calculated on the basis of the Fischer’s Equation. This equation explains that real interest rate is the simple difference between the nominal interest rate (N) and the inflation rate in an economy (I). R= N – I. The inflation rate for an economy is again calculated from the consumer price index (CPI) of a country. CPI is the simple average of a particular basket of goods and services produce d in nation. I = [CPI(this year) – CPI(last year)] / CPI(last year) (Baumol and Blinder 77). Figure 3: Real Interest Rates of Japan over Time (Source: â€Å"World Bank†) The above graph explains the real interest rate in Japan over the years. The entire quantitative data for the purpose of the research in this paper is taken on annual basis. The data table for the above line graph is given in Table 1 in the Appendix. Solow Model Analysis The Solow Model of growth is based on the concept of long run economic progress within the framework of neo-classical growth model. The neo-classical concept of growth states that a country can grow rapidly over time with the help of capital accumulation, population growth, technological progress and productivity. Figure 4: The Solow Model... According to the view of the neoclassical economists, the technological progress seen in the economy of Japan should have facilitated the growth of its national product. Moreover, the technological progress in the country should have reduced the use of labor in its economy. However, this is not the real scenario in Japans economy. The service sector income of the country contributes to the majority of its national income. In the last few years, Japan also had to face a severe decline in its national income, net domestic savings and real interest rates. This is because, in the real world, the idealistic view of endogenous growth does not exist. The crises of credit and fluid capital in the market have reduced the level of national income in the economy of Japan (Paul 47). The fall in the level of production capabilities has forced to reduce the national income of most of the countries (like Japan) in the world after the global recession. The decline in the national income has, therefo re, resulted in a fall of the per capita income level of the country. The fall in the income level is in turn responsible for the decline in the net domestic savings in Japan (Mankiw and Taylor 132). As the gross amount of savings in Japan has fallen over time, the number of investment opportunities in the country has also declined. After the emergence of globalization and liberalization in the world economy, the prices of most of the goods and services in the market are determined by the free market forces of demand and supply.

Thursday, February 6, 2020

Globalization Has Had Positive Impacts On Most Workers In The Third Essay

Globalization Has Had Positive Impacts On Most Workers In The Third World - Essay Example Although globalization has contributed to increased environmental consequences and widened the wage gap, it has contributed to the high demand for employment opportunities, increased competition and cultural diversity; thereby, creating instantaneous changes within the social structures of many cultural societies. History of Globilisation Globilisation can be traced back to the historical process, which began during the immigration of people from Africa to other parts of the globe. The migration process of merchants and labor force across the borders contributed to new changes including the new ideas, cultural diversity and new products. The first phase of globalization began in the 16th century during the pre-modern period where there were some improvements in maritime technologies (Lindio-McGovern and Wallimann (2009, p. 123). This period contributed to varied changes including maritime exploration, discovery, and centralization tendencies associated with monarchies and development of modern states. The second stage of globalization started on the late of 18th century, and this phase was marked by extensive Industrial Revolution. This was the time when human technology began flourishing, productivity increased and the consumption level for commodities increased. Globalization increased in 19th century and major developments were experienced in all sectors across the globe. The economic growth in many countries started expanding in the mid 1980s and the earlier 20th century. The modern globalization is the latest age of globalization that began in late 19th century throughout the 20th century; thus this period can be marked with rapid industrialization that allowed cheap production and labor force (Roberts and Hite 2007, p. 56). The... The research study indicates that globalization has significantly increased the amount of economic activities taking place across national boundaries, however, this has had huge impact on the lives of labor force and other communities everywhere. This is because the current globalization with diverse international policies and regulations underpinning it has contributed to increased hardships in the third world economies. This paper makes a conclusion that although globalization has contributed to increased environmental consequences and widened the wage gap, it has contributed to the high demand for employment opportunities, increased competition and cultural diversity; thereby, creating instantaneous changes within the social structures of many cultural societies. Therefore, to a larger extent, globalization has had impacts on the third world countries and many of them are positive impacts, which have contributed to economic growth in many of the third world nations. Developing nations have benefited from globalization because of increased employment opportunities and many of them are able to compete favorably with their competitors. It has also promoted free trade and increased cultural diversity, as well as, changes in income levels has companies have increasingly found access to international markets that offer outsourcing. However, to a smaller extent, globalization have contributed to increased environmental degradation, created capitalist society, widened income inequalities and increased poverty levels as capital flows are repatriated to the companies investing in developing nations.