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Japan’s economy
ECON 1311 – Principles of Macroeconomics
Dr. Seif
Done by: Mustapha Abdullatif Dimassi
201200040
Hussam Iskandarani
200800510
Wael alkahlan
Tarek alshahrani
Economical History of Japan
Japan is one the most developed countries in the world today. This is researched by the GDP and
the net growth of the economy in the country. Japan had a blast in their economy after the
bombimg of hiroshima and nakazaki. But their economy grew faster then ever in order to restain
their economy as it was before. Japan exports a lot of products, mostly electronical
technowlodgies just as computers and phones. Japan is also known to export one of the highest
quality through out the world.
Japan had the world's second largest economy for 42 years from 1968 to 2010. Before the world
war 2, japan had an outstanding GPD growth by its manufactured products that was exported
through out the world. When Nakazaki and Hiroshima whier bombed by the US, about 40% of
the nation's industrial plants and infrastructure were destroyed, and production reverted to levels
of about fifteen years earlier. This was an economic crisis for Japan at that time.
The early postwar years were devoted to rebuilding lost industrial capacity: major investments
were made in electric power, coal, steel, and chemicals. By the mid-1950s, production matched
prewar levels. Released from the demands of military-dominated government, the economy not
only recovered its lost momentum but also surpassed the growth rates of earlier periods. Between
1953 and 1965, GDP expanded by more than 9% per year, manufacturing and mining by 13%,
construction by 11%, and infrastructure by 12%. In 1965 these sectors employed more than 41%
of the labor force, whereas only 26% remained in agriculture.
There are a lot of factors of growth in Japan which increases the growth rate every year. Japan's
labor force has contributed significantly to economic growth, not only because of its availability
and literacy but also because of the its resonable wages demands. High productivity
growth played a key role in postwar economic growth. The highly skilled and educated labor
force, extraordinary savings rates and accompanying levels of investment, and the low growth of
Japan's labor force were major factors in the high rate of productivity growth.
Japanese consumers have gained benefits from the county's economic growth. Customers have
stimulated the economy through demanding more products and savings for investments.
As the economy in Japan rose, the disposable income was almost stable and not changing. at 1
percentage point less than average GNP growth in the late 1980s. Real household expenditures
did rise during Japan's economic growth. Living standards improved sharply in the 1970s and
1980s. The share of total family living expenses devoted to food dropped from 35 percent in
1970 to 27 percent in 1986, while net household savings, which averaged slightly over 20
percent in the mid-1970s, averaged between 15 and 20 percent in the 1980s. Japanese households
thus had greater disposable income to pay for improved housing and other consumer items. The
increase in disposable income partly explained the economic boom of the 1980s, which was
pushed by explosive domestic demand.
Here is a graph showing the GDP of Japan from 1960 to 2012:
Educational levels in Japan
Japan is known to have a high waducational level through schools and universities. From 2000 to
2009 is it recorded that their was a huge rise in the number of students attending primary schools
all over japan. It is said that some students stay in the educational systems for 17 years.
Number of Pupils in Compulsory Education:
It is pridicted that by 2020, about 95% of students in the ages of 4 years old will have to attend
the compulsory childhood education. Over all the population has decreased by 7% from 2000 to
2009 at EU level within compulsory education. The expected number of years that a student
should stay in the educational system in 2009 is almost more then 17 years. This covers some
fairly wide differences across the EU Member States.
Students populations in percentage per age. ( % / age):
Japan’s Population in 2010 was 128,056,026 millions. But there was a decline in Japan’s
population in 2010. The population declined by 123,000. The reason of all these declines is that
families decide not to have many children so that they don’t spend more. And women marry at a
later age or not marry at all in their life. People in Japan in the 20th century had a hard time
finding regular jobs in order to spend on their families, so they decide either not to marry or not
to have children due to the cost of life. Japan is aging faster than other nation: the result of the
one world's smallest birth rates combined with the world's longest living people. The rate is
twice as fast as in other industrialized countries.
Facts about Japan:
Population
127,368,088 ( 2011)
Age Structure
0-14 years (13.1%)
15-64 years (64%)
65 years and over (22.9%)
Population growth rate
-0.077% in 2011
Birth rate
8.39births/1000 population
Death rates
9.15 deaths/1000 population
Net migration rate
0 migration / 1000 population
Major cities population
Tokyo: 36.507 million
Osaka-Kobe: 11.325 million
Nagoya: 3.257 million
Fukuoka-Kitakyushu: 2.809 million
Sex ratio
At birth: 1.06 male/female
Under 15 years old: 1.08 male/female
15-64 years: 1 male/female
65 years and over: 0.76 male/female
Total population: 0.94 male/ female
Educational Expenditure
3.5% of GDP in 2007
Health Expenditure
9.3% of GDP in 2009
Here is an image showing the population in some major cities in Japan
(millions).
Unemployment Rate in Japan was unchanged at 4.20 percent in October of 2012 from 4.20
percent in September of 2012. Historically, from 1953 until 2012, Japan’s Unemployment Rate
was 2.7 Percent reaching an all time high of 5.6 Percent in July of 2009, and recorded a low
percentage of 1.0% in November of 1968. In Japan, the unemployment number of people are the
people that are willing to work but connot find a job, these people are counted I n the labor force.
This is a chart with historical data for Japan Unemployment Rate.
Exchange rate (currency):
The Currency of Japan is the Yin. It is the 3rd most traded currency in the foreign exchange
markets after the US dollar and the Euro. In the following table there are some exchange rates of
the Japanese yin:
Japanese Yen
1.00 JPY
inv. 1.00 JPY
Euro
0.008996
111.158604
US Dollar
0.011859
84.326761
British Pound
0.007333
136.364805
Indian Rupee
0.653034
1.531315
Australian Dollar
0.011401
87.708969
Canadian Dollar
0.011782
84.874199
Emirati Dirham
0.043556
22.959177
Swiss Franc
0.010866
92.034301
Chinese Yuan Renminbi
0.073941
13.524307
The Japanese government consists of the central and more than 3,000 local governments. The
local government system has 4 layers and includes 47 prefectures, 13 metropolitan cities, 654
cities, and 2,566 towns and villages. By Japanese law, the central and local governments are
financially independent, but in reality, the central government tightly controls local budgets.
local governments must receive approval from the Ministry to change tax codes or tax rates and
to issue local government bonds (Chiho sai). However, the central government does not dictate
local governments' expenditures. The central government can only request that local
governments increase their public works spendings cannot force them to do so. Therefore, there
is no guarantee that all funds are actually spent.
Graph showing the Final Consumption Expenditure in Japan:
Business Cycle:
In the Business cycle of Japan, the GDP doesn’t seem very good. Shirakawa has expressed his
concern on the production and the net export trends. In the 2008 there was a financial crisis
which brought down the economy until 2009 when Japan started to recover its economy back.
The Investment was started under the U.S. Japan Economic for Growth launched by President
George W. Bush and Prime Minister Junichiro Koizumi in June 2001. Under their leadership, the
group met for high-level talks in October 2001 and May 2002 and at the working level in
December 2001. The Initiative has also benefited from the valuable insights of U.S. and Japanese
private sector participants. In addition, the Initiative has settled several public programs,
including a seminar in Chicago in January 2002, and seminars in different Japanese cities in
March 2002.
The economy in Japan was stagnated in the 1990s after its stock market bubbles burst. Industrial
production decreased by 38%, to its lowest level since 1983. Real GDP fell at a yearly rate of
12% in 2008, and may have decreased faster in the beginning of this year. The OECD forecasts
that Japan's GDP will shrink by 6.6% in 2009 as a whole.
The exports in Japan’s GDP are smaller than in Germany or China. During the ten years to
2001, net exports contributed nothing to Japan's GDP growth. Then exports did increase, from
11% of GDP to 17% last year. Net exports accounted for almost half of Japan's total GDP
growth in the five years to 2007.
Ethnic groups
98.5% Japanese and 1.5% other. The concept of the ethnic groups by the Japanese statistics is
different from the ethnicity census of North American, Australasian, Brazilian or some Western
European statistics. For example, the United Kingdom Census asks ethnic or racial background
which composites the population of the United Kingdom, regardless of their nationalities. The
Japanese Statistics Bureau, however, does not have this question yet. Since the Japanese
population census asks the people's nationality rather than their ethnic background, naturalized
Japanese citizens and Japanese nationals with multi-ethnic background are considered to be
ethnically Japanese in the population census of Japan. Thus, in spite of the widespread belief that
Japan is ethnically homogeneous, at least one academic recommends description of it as amulet
ethnic society. Internal to Japan, a distinction between 'Polynesian-type' (darker-skinned, roundeyed) common and 'Continental-type' (lighter-skinned, narrow-eyed) yayoiis sometimes
observed, although the popular shorthand does not actually reflect the observed 90% Yayoi /
10% Jomon haploid-group frequency of modern Japanese DNA.
Foreign citizens
More than 2.5 million (potentially higher because of undocumented migrants), 14.9% up in five
years. North and South Koreans 1 million, Chinese 0.6 million, Filipinos 0.5 million, Brazilians
250,000 and Peruvians 200,000. Other nationalities (examples): Americans, Canadians,
Australians, British, Indonesians, Thais, Africans, Iranians, Russians, Turks, Indians and others.
Marital status
Over 15: Never married Male 61.8%, Female 58.2%. Never married Male 31.8%, Female 23.7%.
25 – 29: Never married Male 69.3%, Female 54.0%.
30 – 34: Never married Male 42.9%, Female 26.6% (July 2000).
Summary:
Japan has faced a lot of booms and recessions in the past 10 years. Overall GDP was good until it
declined by time. Investments were between Japan and U.S as partnerships. Unemployment, exports,
investments, business cycle, and population have kept on changing over the years which caused the
economy to grow and to shrink. The bombing of Hiroshima and Nagasaki has dropped the economy
down steeply. But Japan did recover its loses in the war. Japan’s economy is very interesting especially
since the last 10 years, where the cycle have had toughs and peaks. I hope that you have learned
something from this project and that all the information was displayed. Clearly Japan has developed its
own indigenous version of economic and socials security which, arguably, offers social protection
comparable to the advanced welfare states of Europe.” Even though Japan has a very high standard of
living. It is considered as one of the most expensive countries in the world to live in due to the very
competitive market and its position as an economic giant. Everything from transportation to food to
apartment rentals may be way over the limit of some individuals unless they are also working highpaying jobs which are rampant in the area. A lot of expatriates are working in big cities like Tokyo and
Nagoya which sufficiently provide them with all of their daily needs including a few more for leisure
and personal satisfaction
Thank You!
References:
www.google.com
www.wikipedia.com
www.ehow.com
www.japan-eco.com