Chapter Five

Article: http://ctv2.theglobeandmail.com/servlet/story/RTGAM.20090216.wjapanmarkets0216/business/Business/businessBN/ctv-business

Summary
On February 16, Japan's gross domestic produce was announced to be dropped by 3.3% in the fourth quarter last year from the previous quarter. Since 35 years ago, the Japan government has never seen the economy shrink at a rate so fast. This was because the global export demand has decreased, and it shows no signs of recovery. The government stated that a contracting GDP value will also decline in the current quarter. As for the last quarter, Japan's export decreased by 13.9% because of this global economic problem, and the fact that Japan has an export-dependent economy means Japan will be greatly affected. Many companies have been forced to cut jobs, resulting in higher unemployment rates, and less consumer purchases. This is Japan's third consecutive GDP value drop, officially marking Japan as being in a recession.

Connection
This article talks mainly about Japan's decline in GDP, and how it is in the midst of a recession, as if a country goes through two consecutive quarters of GDP declination, a recession occurs. GDP measures the market value of total goods and services produced in a given time period, and for this to be declining in Japan is because of the decrease in global demand for Japanese products. The fewer the demand, the less Japanese workers are needed to make the products, increasing the rate of unemployment. The type of unemployment explained in the textbook that corresponds with this situation would be the demand-deficit unemployment, where employees have to be laid off because there is so little demand that it is too hard to sell their products.

Reflection
It is a shame that Japan, having one of the world's most largest economies, is facing an economic recession. Since Japan depends so much on exporting goods, the decrease in global demand is sure to create a dent in their economy. Since unemployment is increasing in the fields of product selling, the government should hire people to work in the field of infrastructure instead. More jobs, such as construction workers can be created. This not only helps the workers by giving them an income, but it also benefits people in that community by improving their quality of living as well. By hiring more people in this field, there would be more jobs available, and this would stimulate spending, and the recession may slowly recover. In addition, global exporting is effective when there is much global demand, but Japan should not only focus on global exporting, but also on other ways for economic growth.