Johan's Econ Blog

President’s Dilemma Presentation May 31, 2010

Working as a group to come up with solutions I think was very effective. We got to hear what everybody thought of the issue, and we also got to hear their ideas being rejected or supported. I found it hard for our group to have a conversation going on for a long time, because we were not that well at staying on track. Everyone was doing their own thing, we however got everything done on time that was needed to be done.

Our presentation did not go very well. I believe that we did have speakers within our group which would have given a stronger presentation. It was however not up to us who made the presentation which was a shame but everyone within the group learnt a lesson. Defending our presentation went a bit better then our presentation, we were called for making things up on the spot which I am sure brought our grade down.

Overall it was not the ideal presentation. For next time we will know what to do better on, aswell as preparing everyone for the presentation and not just a few of us. This is however up to each individual, and for some individuals it seems very hard for them to spend time learning the presentation.

Kobe Luminarie Going Under May 5, 2010

In Kobe, Japan, every year the Luminarie is held. It is a light show which is kept up for two weeks, with lights turned on for a few hours every evening. The purpose for the light show is to remember those who died in the Great Hanshin Earthquake in 1995. It is for many people a very important tradition to go there every year to show respect to any relatives or friends who might have died in the earthquake. For many others a nice place for a date or to enjoy the food from the little market held around the area of the light show. There are however many rumors about not holding the Luminarie next year due to the extremely high costs to hold it. It would be a huge mistake to not hold this beautiful light show due to high costs. The Luminarie supports something so much greater than money. Which people should realise but ofcourse in our world people do not always realise that. Therefore, to get rid of the market failure the Luminarie should hold a very small enterence fee next year to make sure that the Luminarie is not lost. The Luminarie should not be there to go profit, it should be there to reach a break even price. This could probably be reached if a enterence fee of only 100 japanese yen per person was charged, due to the so many people going there every year. This would get rid of the welfare loss which is shown in the graph below. In the graph one can also see the reason for the market failure. It is simply because the Marginal Social Cost is so much greater then the Marginal Public Cost that there is a negative externality. This event needs a change soon in order to survive.

Earth Day: Saving Paper April 21, 2010

In Canadian Academy Tuesday, the 20th of April. We had a non print day. Which led us to saving a ton of paper. As seen from the graph below, the benefit of using paper is a higher private benefit then a social benefit. What we are forgetting when we are using paper is that everytime we are using paper, the society has to pay for it. Indirectly ofcourse. There are so many processes that are included in making paper which is costing the society due to their polution. Ultimately what Canadian Academy was trying to do with this non-print day, was to decrease the marginal private benefit line and cut down the cost the society has to pay for our overconsumption of paper. The question remains if it really was that useful, considering that people only printed out the papers that they could not print out the day after.

Best Economy In The World April 13, 2010

In class we had to do a presentation on the worlds best economy. We had to select three criteria to look at and three countries. Before selecting our criteria we chose the countries Sweden, Denmark, and Switzerland and based on their success we selected the critera. Click Here to see a powepoint slide on the criteria and the country that has the best economy in the world.

Melbourne Data Base Response Reflection March 30, 2010

I could have done much better on my data respone than I did. For part a, I did really well and everything was fine. For part b, I am quite satisfied with my mark, and I felt like I got the answer down. On part c is where I messed up. I made the question harder for myself, then it really was. I do however think that my answer did show some kind of understanding for the question, I stated very clearly that there will be a decrease in cars but I used the wrong diagram to support the answer. For part d, for next time I need to remember to be more balanced in my answer. I did not talk at all about the positive things about free transportation. For next time I need to think more carefully about the questions and not make it to difficult for myself, also have a much more balanced answer, and not only look at the bad sides of free transportation.

5 Major Problems Leading to Japans Downfall In Economic Growth March 29, 2010

In Japan there is a very strong tradition and culture. The culture involves things such as respect the elders, and never question them even if you know they are wrong. This creates big difficulties, in the sense that they become very close minded and do not think for themselves. This is seen in the article below. Why the west is so great at higher level thinking is because we are told to always question something that we do not believe, which enable us to come up with the best solution to our problems with a group of people. While in Japan, most times one person knows what is the best for the company and noone is to question it. The culture also concider it weird to have women as the very high officials of a compnay. This is not a very good thing, since women do also have many great ideas.

Another problem that is mentioned in the article below is that many Japanese companies are living in the past. They are living in the glory days of 20 or 30 years ago. The bad thing about this is that the parliament of Japan have an overload of papers and are not using enough computers to sort out papers which would increase efficiency. The universities of Japan are not using technology to a very great extent either, which means that the efficiency in the classrooms are not to the point where they could be. This gives Japan a huge disadvantage to the countries that are using technology to increase its efficiency. It also gives the people of Japan the disadvantage of not knowing how to use technology as well as other people from other countries when they get out to the working world.

The third problem Japan is having is that they are giving to high salaries to their workers which means that most business will not do very well. This is because of the law of demand states that as price rises, demand decreases. Therefore, countries such as South-Korea and Vietnam where labor cost is much lower will have more business. Which is taking away opportunities for Japan to make money.

The fourth major problem is also that of deflation. According to Takahide Kiuchi, the chief economist of Nomura Securities, deflation is a major problem and is very dangerous. Japan cannot do anything about it right now and Takahide says that Japan should have pushed against the deflation in the 1990s but at that time noone could have guessed that deflation was this dangerous. He also argues that it is to late to change that now.

The last major problem is that Japan is not having enough new born children and in 2030, about one third of Japan’s population will be 65 or older years old. This will mean that the country will not be getting as much tax revenues because these people are not pulling in any money and also the healthcare costs will boost up for the country. The country will have a real struggle to come up with the money to afford the boost of healthcare when the time of 2030 comes. Will they not have enough money to take care of everyone at that time I recon that many will die ahead of time.

OECD Activity March 29, 2010

Sweden:

Real GDP:

2007: $350.7 billion                                                       

2008: $349.3 billion

2009: $333.2 billion

Real GDP per Capita:

2007: $38,800

2008: $38,600

2009: $36,800

Real GDP growth:

2007:  2.7%

2008: -0.4%

2009: -4.6%

Looking at the data above on Sweden’s economy, it is clear that they are not doing so well. This can be clearly seen because the amount of money are decreasing which is never a good thing, also the GDP growth is clearly a fall because of the negative. Sweden was doing very well up till 2007, this is seen when looking at the GDP growth which was increasing. But then the economic crisis hit, and all economies around the world decreased, including Sweden. Most Swedish people must have lost nearly $2000 in their income, which is seen by looking at the GDP per Capita. This means that some people most likely would have moved houses to a much more cheaper area, and their standard of living must have decreased.

Capitalism Seminar Reflection March 14, 2010

During the Seminar recently held in class, I found them to be very useful to gain different perspectives about the topic Capitalism. I also learnt that you really have to be agressive on the speaking front to get people to hear your ideas. This was seen very well for the first 20 minutes of class, considering that only about 4 people talked during that time period of time. However, overall I found the seminar very useful and very interesting topics were brought up.

For next time I will be more active from the start. I found myself so many times having something good to say but every time somebody else said something that brought me off topic. Therefore, for next time I will also be much faster to start talking when the person before stops to talk. By this I am hoping to contribute more to the conversation then I did for the first seminar. But, on the other hand I will not talk to much because at a point one will talk about nothing important. Ultimately I like to just lean back and enjoy a good seminar and listen to other peoples views on the issue.

Danube River is Getting Help February 17, 2010

The Danube River is located in Europe, it is a very important trading and shipping route for boats. It is infact the most international river in the world. This means that the river is used to a very large extent by many shipping boats. Which leads to very polluted water in the river. This is a negative externality. As seen in the diagram below, the Q represents the quantity of boats going through the Danube River today and the P is the amount of money recieved from the boats going through the river. According to the BBC 14 countries are starting a campaign to clean up the river. Which means that they will try to bring down the amount of boats going through and increase the price for boats that do pass through the river. In other words, they are trying to move from the points Q to Q1 and from P to P1. This in turn leads to a decrease of the negative externality and wellfare loss.

BBC article on Danube River

Price discrimination on cigarettes in the U.S February 2, 2010

Many U.S smoking addicted people are suffering because of the high cigaratte prices there. Cigarettes is a great product to put tax on, this is because the product is very addicting; leading to people buying them no matter where the price is at. The U.S government clearly manipulates the price on cigarettes in order to get money and also to try to decrease the amount of people smoking. Because of these high prices there are many online stores opening up selling cigarettes. In the U.S a carton of cigarettes costs up to 52 dollars. Compared to Europe where they cost 17 dollars. This is why so many European people are taking the price manipulation of cigarettes in the U.S to their advantage. Is it right to make the U.S people who are addicted to smoking suffer?