Japan+GDP+figures+show+sharp+slowing+of+economic+growth

Title of article: Japan GDP figures show sharp slowing of economic growth Date of article: 16 August 2010 Date of retrieval: 24 April 2011 Link: []

Vocabulary: GDP-Gross Domestic Product: The total value of the final goods and services produced in an economy in a year. C + I + G + X – M Economic growth: Increase in GDP of a country Devaluation: The reduce of the official value of a currency in relation to other currencies Exports: Selling goods or services to other countries Imports: Buying goods or service from other countries Consumption: The buying of goods and services from consumers. Short-termism: The concentration on short-term projects or objectives for immediate profit at the expense of long-term security.

Summary: The main concern about this article explains the stagnant economy that Japan is facing due to mistake in their policy choice. As Japan relies heavily on exports for their economic growth, the increasing value of yen puts them at a difficult situation because other countries will be less likely to import goods and services from them. Looking at this situation, Japan will be less competitive abroad. Furthermore, the private consumption is fairly low, which makes demand of goods and services weak and so the consumer spending needs to be increased. The widely held belief that the China’s economy would soon overtake the Japan’s economy seems to be credible from this article. Evaluation: This article provides a deal of reasons why the Japan’s economy is said to be faltering. The Japanese government hopes to improve their economy by encouraging people to invest in banks, and also lower interest rates. However, it is possible that this method might not be as effective as there is nothing for the consumers to invest in. Regarding the belief held that the economy of China will overtake the Japan’s economy, I disagree with that based on a few reasons. The HPI (Human Poverty Index), which measures the gap between the rich and poor differs greatly for both countries. Japan has a more evenly distributed income, whereas the gap between the rich and poor in China is huge. Furthermore, the HDI (Human Development Index) in Japan is much higher than China. This shows that even though China may be experiencing economic growth, it still needs to take them for economic development. In summary, the GDP does not prove everything in an economy. The data collected has its limitations like being inaccurate due to the various measures from a wide range of sources, and also unrecorded or under-recorded economic activity.