Economics answer question Essay Example | Topics and Well Written Essays - 1000 words

Economics function question - Essay ExampleA decade after the World War II, Japan has go through astonishing economic figures, flashing a near double-digit average annual growth rate of 9.2% and change magnitude its real GDP sevenfold (Itoh, 1). Itoh has identified at least four factors relating to the miraculous climb of the Japanese economy since early 1950s. Generally, what helped Japan gain such a high growth rate atomic number 18 timely help from abroad with a favorable economic environment and sound macroeconomic policies. iodine of the accidental help to the Japanese economy is the favorable international environment. The US global strategy of creating a bulwark against communism by the substantial reduction of war reparation in addition to a recovery aid programme has helped Japans economy (Itoh, 2). The growth if world trade has likewise facilitated Japanese exports and imports. The chip factor that brought Japans booming economy was the availability of new technologi es. The Japanese were able to easily adapt the technologies brought from the US into their production primarily due to the high adaptability of Japanese workers and rising level of education and training. It has then acquire an important jumpstart for the Japanese automobile industry.The favorable terms of trade... The fourth reason for the Japanese economic boom was the cheap and docile labor. The large shift in working population away from rude areas provided the prerequisite amount of relatively cheap labor for the rapid growth of urban secondary and ordinal capitalist industries (Itoh, 3). Some macroeconomic policies applied by the Japanese government also did well to their economy. It includes the necessary infrastructure such as seaports, roads, railways and communication system (Itoh, 4). Generally, the Japanese economic growth was mainly underage on expanding domestic market and maintained a relatively low rate of export habituation (Itoh, 4)The Economic StruggleThe co llapse of the Bretton Woods International Monetary System has brought a domino solution of economic crisis to Japan. The trade deficit of USA coupled with multinationalization of US firms increase private foreign investments atomic number 82 to a substantial outflow of dollar funds. This event has resulted in the appreciation of the yen, as all economists make love this event hurt the export of Japan. Countries resorted the fully floating exchange rate in 1973, believing that this would in stages resolve international trade imbalance. However, the automatic adjustment mechanism did not work particularly in the case of Japan (Itoh, 6). There also a resulting inflationary pressures making the products more expensive. An over-accumulation of capital also occurred to the point wherein the total of capital became so numerous compared to the Japanese working population. This condition became favorable to worker, whence nominal wages were observed to have increased by 63% in 1970-1973 . After these events, the Japanese economy became