Tuesday, March 22, 2011
Will Japan's Quake rock the World's Economy?
For grade due 3/25/2011. So what do you think? How will devastation in the world's third largest economy affect the economy in other countries? How will this affect supply? Demand? Exports? GDP? Investment?
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ReplyDeleteI read PCWorld regularly and a few days after the quake a writer had expressed interest in flash memory production.(the memory used in smart phones, flash drives, the new 3DS and top of the line computers) Japan is one of the largest producers of flash memory home to companies such as Toshiba and Samsung. Flash memory takes a long time to produce with production times taking 2 to 3 months. As of recently smartphones, tablets and the new 3DS has been selling in unprecedented volume (the 3DS sold out in Japan on preorders) which has put severe strain on the supply for flash memory. Now Japan has nearly halted production of flash memory which will probably raise the costs of flash memory. In addition the IPhone 5 or 4GS is projected to be launched 3 months from now which is expected to sell out (as iphones usually do).
ReplyDeleteI do think that this quake will affect the world's economy because we depend on many items from Japan. For instance, steel. Moreover, Japanese cars are selling very cheaply today. Honda civics, I believe, are selling for $89 a month. This could be beneficial to us here in the states. However, this could also mean that we will see a decrease in the supply of Japanese cars in the future. In addition, supply of many Japanese products will decrease while demand will stay high. This may bode ill for us because we need to find a substitute good for all the products we import from Japan. Even though imports from Japan will probably decrease, I think that our exports will increase because we will be sending many supplies to Japan for recovery. GDP for Japan will definitely decrease and there will be less investments in Japanese products.
ReplyDeleteI think we will definatly see a supply decrease, particularly in electronic devices due to the damage to the factories and resources in Japan. According to the article, Japan does not have that big affect on global demand levels currently. I think that this influence will decrease even more as Japan falls into an economic crisis. In a more long term sense though, I wonder if Japan's demand will eventually increase by a large amount. Judging from the pictures and video I've seen of the devestation over there, Japan is going to purchase large amounts of materials in order to rebuild the billions of dollars of damaged infrastructure.
ReplyDeleteI think the devastation will affect countries in different ways; Some will benefit from Japan's need to reconstruct like the use of cement for new buildings, however, the lack of imports like cars to that country from Japan may balance the gain. The devastation will definitely affect supply especially of new technology, in the short run because many of Japan's businesses will be closed down for repairs. However, considering our country is going through a paradox of thrift, everyone saving when they should be spending on material items like electronics to stimulate the economy, I don't think we should be worried about how this will affect us. In other words, the demand for Japan's main export is low in this country. China on the other hand, with its growing economy should watch out, they may not get their new lcd tvs or ipad 3s as soon as expected. The GDP loss is projected not to be as intense as I initially thought and therefore I think we should just wait and see who grows in GDP in the long run based on Japan's loss.
ReplyDeleteThere is no question that the recent earthquake and subsequent tsunami will detrimentally affect Japan's production capability. Obviously, the country has already lost a significant portion of its nuclear power facilities. Many factories were also destroyed during the disaster. On a global scale, international trade between Japan and other nations will most likely be damaged. Japan's supply of goods will decline dramatically, while it's doubtful that demand will be affected. Investment spending for goods made in the country will decrease as will its GDP.
ReplyDeleteThere will most likely be a supply shock from this event, because the disaster has destroyed important production facilities in the area and almost everyone who were employed are obviously not going to be able to work under such conditions. Trade will very likely be adversely affected, especially since the United States is one of Japan's most important partners. Most of the people in the U.S. and the world consume goods (namely electronics) from Japan's markets.
ReplyDeleteIt's obviously going to have a pretty large impact in other countries economies. If you own a Japanese car, you're basically screwed. Most of the plants that produce parts to fix them were destroyed, which makes us have to pay more for them. Japan won't be supplying other countries with goods until they are ready to, so supply will decrease, demand will definitely go up. In the long run, Japan will probably end up with a huge demand for goods which they cannot meet.
ReplyDeleteI think it will have a huge effect on the economies of other countries, how could it not? Being the 3rd largest economy in the world means that it must have relations with other countries. There will be a supply shock making all products manufactured in Japan to have huge price increases and many of them have a fairly stable demand, like car parts, if you own a Japanese car then you are tied to the product whether you like the prices or not.
ReplyDeletei believe that the recent disaster in japan will have a large effect on the economies of the world. supply will plummet, especially in electronics and a number of cars, the infrastructure has been completely crushed, production will be slow to start up again, and the prices that we pay for devices produced in japan will raise significantly. in the long run,i believe that japan will be spending countless billions trying to build back their infrastructure and hopefully increase production up to the pre-quake levels. japan is the third largest economy in the world and the effects of this earthquake will be felt (no pun intended) for years to come.
ReplyDeleteAs we talked about in class I think that this earthquake will cause a huge supply shock. The impact will be felt by many people all across the globe. There are a lot of people who drive Japanese cars and all of the factories that make the parts for these cars were all basically destroyed. The factories being gone will make the supply decrease dramatically and the price to increase. There will also be many other products that will be affected. Mainly the electronics industry will be, because Japan is one of the leaders in technology, so all of their new products will not be able to be sent out to the rest of the world. The trade will be slowed from Japan because they will need to meet their own needs before they start to help everyone else's.
ReplyDeleteJapan being the world's third largest economy will certainly cause a supply shock on the rest of the world because many things are produced in Japan for example cars and electronics. With the factories completely destroyed production will stop and countries will have to seek other means of satisfying the demand of the world. Hopefully Japan will recover quickly and the world economy can return to normalcy.
ReplyDeleteThough the United States both opened Japan to trade in the 19th century and spurred its rapid economic growth after World War II, we are finally seeing the country come in to its own, in one way or another. This earthquake-induced economic foible may actually help Japan more than hurt it, as the country will be forced to rebuild most of its infrastructure and may attract renewed investment as a result. When Japan finally does get back on its feet after the quake damage has been remedied, it may provide a much needed boost to the global economy without the economic troubles associated with a "standard" (non-disaster induced) economic downturn. Renewed demand from a hungry and infrastructurally devastated Japan may be just what the world economy needs to jump start a new wave of investment and expansion.
ReplyDeleteSupply might be momentarily curved, but the great thing about rebuilding is that like a forest fire it tends to lead to increased growth. Demand for constructional equipment and raw resources will dramatically increase, Japan will buy much of this from outside countries increasing exports across the world. Supply in Japan will be curbed but only temporarily. It would be a negative supply shock. Exports decreased and imports increased.
ReplyDeleteThe quake in Japan will definitely effect the economy in different countries because Japan manufactures many important products, such as electronics. The demand in Japan for goods will increase due to the destruction of many areas in the country. The price on Japaneses electronics and cars will surely increase in other countries because their supply of these products have decreased, yet demand around the world has remained unchanged.
ReplyDeleteSupply will undoubtedly decrease in the short term. The technology sector will be feeling this the most, but the affects will hit other industries as well. Demand will probably grow a lot as Japan attempts to rebuild their infrastructure.
ReplyDeleteDue to the quake supply will be negatively affected in the short run while the demand for goods will increase in Japan. Outside countries will see less products imported from Japan as the disaster continues. Until Japan rebuilds countries will need to find other sources of trade.
ReplyDeleteSupply will be short-run negatively affected while demand will increase in Japan. The global economy will see less exporting from Japan for a little while as the disaster continues and they are trying to stabilize their own economy. This may be a long run benefit for Japan as all natural disasters eventually are, as the country will be forced to rebuild tons of infrastructure and may consequently increase investment. Eventually post-recovery, it may provide a partial remedy to the global economy without the typical economic troubles associated with a economic downturn. Renewed demand from Japan will spearhead a new wave of investment and expansion.
ReplyDeleteAccording to the article, Japan "exports more than it imports." Thus, all the countries receiving a majority of their goods from Japan will be severely impacted. One example is the United States. Its car companies now have a shortage of car parts from Japan. The earthquake in Japan has created a supply shock which will increase prices dramatically due to a short supply of products. Investment in Japan will probably decrease because investors will reanalyze possible risks.
ReplyDeleteDespite the fact that several economists think that Japan doesn't create that huge of an impact on the world's economy, I think that most countries who are dependable on Japan's exports would sustain a major damage in their own economy. Japan's GDP would decrease but this is only temporarily. The problem would be its exports since there will be more earthquakes and tsunamis in the future, investors are hesitant to invest in Japan and that would damage the country's exports. Currently, there is a supply shock but industries can easily adjust to that through shifting the production process to other outlets in different countries.
ReplyDeleteThe supply shock that will be caused by the earthquake in Japan is not surprising. Of course, being such a strong exporter of many goods, such as cars in America, the loss of factories and inputs of production will make producing anything not only expensive, but pretty much impossible at this point in time. Prices are going to skyrocket and some products might even become completely unavailable to other countries. However, Japan will have the chance to recover in due time and its economy will most definitely emerge stronger than ever.
ReplyDeleteI do not think the supply shock will be as devastating like many other people have said above.
ReplyDeleteThough Japan is a huge exporter of electronics, China has made huge strides in that field and is a huge contender. The price increase will not be that much. As for cars, Toyota is shutting down many North American plants.
In short, we haven't really missed Japan these past 30 years of their slumping economy, and we won't really miss them now.