Japan+Economy+Shrinks..

Source: Bloomberg - http://www.bloomberg.com/news/2011-02-14/japan-s-economy-shrank-at-1-1-annual-pace-gdp-surpassed-by-china-in-2010.html
==== Date: By <span class="author" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;">Keiko Ujikane - <span class="datestamp" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;">Feb 14, 2011 10:03 AM   ==== ====  Brief Summary: This article mostly focuses on the macroeconomics of Japan. It gives insight to the GDP and how it is measured. For example, it states that GDP is decreased due to ""   slowing in exports and fading of government stimulus programs". This particular statement can be bolstered through the statements "Net exports... subtracted 0.1 percentage point from GDP" and "consumer spending... which accounts for more than half of GDP..." Here, the article connects with the ways how GDP is measured: the expenditure method and output method. This article also gives insight of how the nation's companies are tied with the nation's GDP. For example, when the government stops its subsidy on cars like those of Toyota's, private consumption eventually dropped thereby dragging down the GDP along. In other words, companies have a direct relationship with the nation's GDP. Lastly, the article ties policies with economic development through Thomas Byrne, the  senior vice president of Moody’s Investors Service. He mentions how “any policy drift or friction” that prevents passage of bills in parliament “would be a credit-negative development”. ====

Vocab:
 GDP: Gross Domestic Product- The total value of all final goods and services produced in an economy in a year

different sectors in the economy. It is the method most commonly used.
Output Method: A way to calculate GDP - calculated by summing all of the value added by all the ﬁrms in an economy (the cost of inputs are deducted).

Subsidy: sum of money granted by the government or a public body to assist an industry or business so that the price of a commodity or service may remain low or competitive
Economic Development: Country's economic progress with welfare taken into account

HDI - human development index: an index that includes data on the three basic goals of development: health, education, and standard of living.
Graph/Chart

This graph shows the GDP of Japan for the last 8 years. Just like what is mentioned in class, GDP fails to cover other factors such as development. As of now, Japan's GDP is said to be raised by 3%. However, we all know that Japan has just suffered from a devastating earthquake and a nuclear crisis. Hence, through this graph, we can see that GDP is not the best indicator for the economy.

Evaluation In my personal opinion, I disagree the ways how economists calculate the GDP. It is too unstable as there are too many factors being taken into consideration (e.g. output, consumption, etc...). One possible solution to this problem is to standardize GDP by just one method. Based on what we have learned in class, GDP is mostly measured through the expenditure method. Hence, I suggest that we stick with that method so that when doing the calculations, it will be less complex. Furthermore, I would also like to mention that we should not focus immensely on the GDP itself when looking at a economy. Just like what we have covered in class, GDP fails to take other factors into consideration; a rise in GDP does not necessarily mean improving people's lives. Hence, while we look at GDP, we should also take other statistics like HDI into account. This problem must not be taken lightly, because governments are basing their policies upon the views given by the economists; if the economists gives inaccurate statistics, then the governments would make inaccurate policies. And, just like what Thomas Bryne mentioned, a bad policy will lead to a bad development.