Macroeconomics Commentary - Japans consumer prices fall on weak domestic demand Essay Example for Free

Macroeconomics Commentary Japans consumer prices fall on weak domestic demand Essay Japans consumer prices fall on weak domestic demand Japans consumer prices have fallen for the first time in four months, as weak domestic demand and deflation continue to weigh on growth. Core consumer prices, which exclude fresh food, slipped 0.1% in October, the statistics bureau said. One of the reasons for the fall is last years cigarette tax rise falling out of the calculations. The strong yen as well as Europes debt crisis are hurting the growth outlook for the worlds third-largest economy. Yen strength In March, Japan was hit by a devastating earthquake and tsunami that caused much damage in the north-east of the country. The government this week passed an emergency budget of $155bn (Â £100bn) to try to boost domestic demand, however the effects wont be felt for a few months. The data underscores the sluggishness of domestic demand, as the economys recovery has taken a breather because of a delay in reconstruction efforts and global economic slowdown, said Takeshi Minami from Norinchukin Research. Japans economy bounced back from recession, triggered by the earthquake and tsunami, in the three months to September. However, the pace is expected to slow because of the pressure on exporters from the strong yen, as well as the bleak global outlook of growth. Oil prices The slowing global economy has caused a decline in crude oil costs. That combined with the yens appreciation have made energy imports to Japan very cheap. Gasoline prices at the pumps have dropped 1% since September in Japan. The yen has advanced 6% against the dollar in the last six months. Some analysts said consumer prices in Japan could further decline as the slowing global economy continues to weigh on the price of oil. Deflation is a persistent fall in the average price level of prices in the economy. Japan experienced deflation where average level of price fell by 0.1%. The type of deflation in Japan is known as negative deflation which resulted from demand side of economy. A fall in domestic demand caused a decrease in consumer prices level and a decrease in real output. The fall in domestic demand was due to last years cigarette tax rise. Government rose cigarette tax to increased government revenue. Cigarette tax charged on producers instead of consumers. Tax increased the costs of production to producers. This shifted the supply curve form S1 to S2 while the demand curve did not change. Cigarette tax depressed the activity of market and placed a wedge. Producers gained less profit and consumers paid more. Hence the total quantity reduced from Q1 to Q2, as figure shown below. Tax charged on producers equilibrium without rising tax The increases in price that consumers paid reduced the willingness to buy. The demand curve shifted to left from D to D1 as figure shown below. Hence the quantity demanded reduced from Q2 to Q3 and price of cigarette reduced from P2 to P4. Tax affects demand indirectly Less quantity demanded of cigarette means less quantity sold at the price lower than without tax. Therefore even lower government revenue collected. What have discussed above would repeat itself as a cycle if Japan government continues to rising cigarette tax. The results of higher cigarette tax combined with several other factors together to reduce the aggregate demand in Japan market. The economy was near full employment level of output, with a small amount of spare capacity. The figure below indicated that as aggregate demand curve shifted to left, the quantity of output and average price level reduced. Demand-pull deflation The biggest problem associated with deflation is unemployment. If aggregate demand is low, business is likely to lay off workers. In fact, Japan already had unemployment rate around 4.7%. High unemployment rate linked with high suicide rate and other security uncertainties. Government tried to correct deflation and to reduce rate of unemployment by means of pass an emergency budget of $155 billion to boost domestic demand. However, the aim will not be fulfilled in short-run. Japan is a developed country. There are periods of rising growth, followed by periods of slowing growth, and falling growth in developed countries. This is known as business cycle which is the periodic fluctuations in economic activity measured by changes in real GDP. The phases of business cycle are boom, recession, trough and recovery. Recession is two consecutive quarters of negative GDP growth. During a recession, consumption and investment fall. Falling aggregate demand leads to unemployment. If more people are unemployed, there will be even less consumption and deflation. At some point the recession came to an end. Output cannot continue to fall as there would be some people with jobs to maintain consumption, foreigners demand exporters and government spending. Japans economy bounced back from recession and started to recovery, triggered by earthquake, from June to September. The real GDP started to increase as government running budget for reconstruction and medical treatments after earthquake. However, the pace of recovery tends to be very slow as a result of the appreciation of yen. The yen has appreciated 6% against dollar in the last six months. Appreciation of yen against dollar means the purchasing power of yen has risen. However, appreciation of yen against dollar occurs at the same time as the depreciation of dollar. An exchange rate is value of one currency expressed in terms of another currency. One of the disadvantages of a high exchange rate is damage to export industries. If value of exchange rate is high, then export industries find it is difficult to sell products because foreigners are likely to reduce the quantity imported since goods become more expensive. Therefore, lower the revenue from exports, slower the pace of recovery. The fell of average price level (deflation) can also be explained by the high exchange rate. When value of exchange rate is high, price of imports will be relatively low. Taken import of oil as an example, the gasoline prices have dropped 1% since September. In addition, price of imported raw materials will reduce the costs of production for firms which could lead to lower prices for consumers. Low price of imported goods also puts pressure on domestic producers to be competitive by keeping prices low. Japan’s government could lower the value of yen by means of buy foreign currencies on foreign exchange markets. Government uses its own yen to buy hence increases supply of yen on foreign exchange market and so lowers its exchange rate. Lower the level of domestic interest rates could lower the value of yen too. This will cause financial investment abroad more attractive. In order to invest abroad, investors will buy foreign currency thus exchanging their own currency and increasing supply of it on financial exchange market. This could lower its exchange rate.

Geronimo :: essays papers

Geronimo Geronimo's grandfather, Maco, had been the chief of the Nedni Apaches. He had been of great size and strength. When Maco had been chief his principle wars had been against the Mexicans. They were seldom at great length of peace with the Mexicans. When Maco's son (Geronimo's Dad) became a warrior, Maco died. Geronimo's father could not become the chief of the Nedni's, because he married a woman from the Bedonkohe Apaches. The two had 8 children- four boys and four girls, including Geronimo. The possibility that one of the boys would become chief of he Bedonkohe was very slim. His mother taught him the legends of his people; taught him the sun and sky, the moon and stars, the clouds and storms. She also taught him to kneel and pray to Usen fir strength, health, wisdom, and protection. When the children were young they would play with each other and sometimes with their mother and father. When they were grown up enough to do real services they went to the field with their parents: not to play, but to toil. They did not cultivate tobacco, but they found it in the wild. All of Geronimo's tribe smoked, both men and woman. No boy was allowed to smoke until he could hunt alone and kill large game such as; wolves, bear, deer, etc. Geronimo's father died when Geronimo was at a young age. They wrapped his father in his finest clothes, painted his face, wrapped a rich blanket around him, saddled his favorite horse, bore his arms in front of him, and led his horse behind, repeating in wailing tones his deeds of valor as they carried his body to a cave in the mountain. They then slew his horses and gave way all his property, as was customary in our tribe, after which his body was deposited in the cave, his arms beside him. Geronimo's mother never married again, which was not a custom to the Bedonkohe Apache. In 1846, when Geronimo was 17 years of age, he was admitted to the council of warriors. If a war had started between tribes he could go on the warpath with his tribe. Geronimo had long desired to fight with his warriors. What he was the happiest about was that he could marry Alope, the daughter of No-po-so. The two had been with each other along time before. So when he got the news that he was in the council of

Pwcs 32

Principles of personal development in adult settings 32 1. 1 Explain what reflective practice is? To create space to focus on my day to day movement, task i. e. whether I’ve done tasks correctly; if I need to work on things; if I need supervision; what do I need to do next. 1. 2 Explain the importance of reflective practice in continuously improving the quality of service provided? It is important because it identifies weakness’s that then can be developed to provide positive outcome, thus continuously providing quality service. . 3 Explain how standards inform reflective practice in adult social care? Standards inform reflective practice because they impact on how I work in a day today setting. I have to be fully aware of them and understand the impactions of not working towards them. Reflecting on standards also gives me the opportunity to update myself on any new standards. 1. 4 Describe how own values, beliefs systems and experiences may affect working practice?My v alues, beliefs system and experiences could impact on the work I am doing with residents if I do not have an awareness of my own values etc. This is because I could find it difficult to accept other people values and beliefs, I might feel mine are the right ones and paths I have chosen are the ways to successful rehabilitation. 2. 1 Explain how people will react and respond to constructive feedback? Constructive feedback gives people the opportunity to develop; if areas for improvement have been identified then this could cause the person to become upset.If this feedback is given in a positive manner then the person is more than likely to accept it and work on improving. 2. 3 Explain the importance of using feedback in improving own practice? It is important that i obtain feedback; this feedback allows me to continuingly improve my working practices; it also identifies any areas of development that I may have, I can then work on these areas and I will continuingly progress in my pra ctices. 3. 1 Explain the importance of using feedback in improving own practice?To have a personal development plan you will have: regular meetings with supervisor specifically for PDP; during these meetings targets will be indentified for example attending training courses; follow up meetings will review what targets have been met and those that are ongoing. 3. 2 Identify sources of support for planning and reviewing own development? To support me whilst doing my PDP I can speak to colleges, my line manager, and tutor if on any courses. Reference books and internet could be ways to help. 3. 3 Explain the role of others in the personal development plan in identifying: Strengths; areas for development?My line manager, colleagues and residents are all able to help me identify the strengths that I have and areas of development this is done in one to one settings, staff meetings and from feedback from residents through peer process. 3. 4 Explain the benefits of using a personal developm ent plan to identify ongoing improvements I knowledge and understanding? As a plan is not set in stone it allows new targets to be added throughout the year. Old targets can also be modified or deleted if necessary. This allows for the ongoing improvement in knowledge and understanding and also meets business needs.

Effects of the Asian Financial Crisis on 1997 - 1006 Words

The financial crisis in many countries in Asia in 1997-1998 was an unexpected event. It was mainly because most of the Asian countries had been enjoying economic growth prior to the crisis. The crisis itself started with the devaluation of Thailand’s Baht in July 1997. The Thailand government decided to float its currency in order to defend the Baht against speculative attack, despite its fixed exchange rate system. This decision was apparently the beginning of the economic downturn of many Asian countries, such as Malaysia, Philippines, Hong Kong, South Korea, and Indonesia. Before the crisis, Indonesia’s economy was growing rapidly; having a low inflation and a well-maintained current account deficit. However, Indonesia surprisingly became the country that was affected the most by the crisis. This paper aims to examine the effects of the Asian financial crisis in 1997-1998 to Indonesian economy and how it could happen. After Thailand floated the baht in 1997, Indonesia’s monetary widened its currency-trading band. It changed the exchange rate regime from floating exchange rate to free-floating exchange rate, causing the Rupiah and the stock market to decline. Before the crisis, the exchange rate between the rupiah and the US dollar was approximately 2,600 Rupiah/USD. The rupiah started to depreciate to 4,000 Rupiah/USD, and dropped dramatically to over 11,000 Rupiah/USD on January 1998. The spot rates were over 14,000 in January 1998 and trading again over 14,000 duringShow MoreRelatedImpact of the Asian Financial Crisis in 1997 and Effect to Latin America1875 Words   |  8 PagesImpact of the Asian Financial Crisis in 1997 and effect to Latin America Name: Institution: Date: Abstract In 1997, the Asian Financial Crisis spread rapidly all over the Asia and affected almost all the economies in the world. 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