Macroeconomics And Macroeconomics Individual Assignment

When it comes to the data and methods, this study used the Federal Reserve Board’s Survey of Consumer Finances (SCF), which is a repeated survey that includes the information on household income and wealth holdings; the Federal Reserve conducts this survey every three years. To test the hypothesis there are

a. Given the change in the value of the dollar between 2008 and 2009, as indicated in the table above, describe the effects this will have on United States tourism in each of these countries.

1. If an economy produces final output worth $5 trillion, then the amount of gross

In recent years, economists have demoted savings on the economic value chain. Keynesians view savings as detrimental to growth because the act removes money from circulation and decreases spending. Policy makers have made rules that reward spenders and reprimand savers.

Japan’s unemployment rate of about 4% opposed to the U.S. unemployment rate of close to 10%. Even the financial debt to GDP ration is an advantage, and debt in the private sector has not increased unlike the U.S. and European countries, (Time, 2009). In addition, since Japan is a huge exporter and with the U.S. demand going downward, the international balances and growth declined especially as the dollar value dropped and the yen surged. •

First being a balanced budget, followed by suspension of new loans from the Reconstruction Finance Bank (this source of supply of money was identified as the root cause of inflation), and lastly, reducing as well as completely eliminating subsidies. The above-mentioned policies were identified to aid in accelerating the Japanese economy. Dodge’s policies caused problems along the way in its implementation but it created a path for recovery without the help of America. The Japanese were encouraged to economize and accumulate capital through such a policy.

Despite the $5.5 trillion invested in retirement and savings plans, many Americans are primed for a lower standard of living during their golden years. Since Social Security and defined benefit plans are becoming a thing of the past, Americans are relying heavily on their own investments later in life. Defined benefit plans have given way for the rise of 401k and IRA plans which are defined by contributions of the individual. Employee sponsored programs in 401ks have been flocked to for their flexibility, tax efficiency and high contribution limits when compared to other retirement accounts.

A world-class manufacturing power was lead into a deep slump. Japan has traditionally possessed a remarkably high savings rate and a moderately low consumption rate. Throughout the previous two decades of recovery and high-speed growth, this ‘savings surplus’ provided greatly needed capital to private industry in the form of bank loans. This money was used to build and expand Japan’s industrial infrastructure power. However, during the 1990’s the ‘savings surplus’, once the essential fuel for high-speed development became a stern obstruction, leading to a severe collapse in demand and causing a heavy drag on Japan’s economic recovery.

Today in Japan, a reinvention is necessary. There are many struggles with the young generation, the old generation, and catastrophic events which should be addressed. Specifically, the Japanese economy has been experiencing deflation for the past twenty years. In an article, the results of the deflation were described. The authors said, “Because of fewer available jobs and lower

The growth advanced Japan to rank as the 2nd largest economy in the world rivaling the United States. However, this economic growth started slowing in the 1970s and in 1990 real estate and stock prices crashed and “the bubble burst” (Drogus and Orvis 240). Luckily, the government managed to get the economy back up and running in 2003 when Prime Minister Junichiro Koizumi reduced regulation, privatized the postal service saving system, and lowered deficit spending.

Data is cited showing that, in an aging population, individuals rely on state support in their retirement years. Suggested policies include financial literacy programs, delayed retirement, automated personal saving, and financial advisory reform. Nishiyama et al. (2014) proposes that a key problem regarding personal savings, assets, and retirement are the very state funded programs designed to help retirees. The research concludes that median income levels among the Boomer generation will not be able to support it’s level of “consumption based on it’s own assets” (Nishiyama et al. p. 65) in the retirement years. In conclusion, this study asserts that the financial education and reflexive retirement delay components provide the most broad and effective measures to mitigate budget shortfalls in an aging

A retirement crisis can be seen looming on the horizon. Countless financial writers have interviewed analysts and actuaries documenting studies showing a large percentage of American workers will be financially unprepared for retirement. The effects will be devastating for an aging population facing increasing life expectancies. The cost to the U.S. economy and to those still working to support the financially

Personal savings for American’s as a whole has been rapidly declining for the past two decades. Starting out at about 9% in the 1980’s, the average amount of savings that American’s had to start out the new century was almost at 0%. The decline suggests a constriction of consumer credit and a weakening in consumer confidence (Ellen, Wiener, & Fitzgerald 58). The lack of consumer confidence can easily be blamed on the recession of 2009. Americans are no longer confident in their retirement savings.

In the last two decades, Canada has experienced a sharp drop in private savings rates. Private savings, from the course textbook (page 174), is defined as, the income that households have left after paying for taxes and consumption. The private savings rate has decreased from 16.2% in 1981, to 1.5% in 2005 (Table 1), which exhibits a higher spending rate, and less saving of leftover income. Economists approach this issue with the understanding that with a lack of tax incentives for saving, we can predict a increase in the supply of loanable funds which leads to a reduction in the interest equilibrium rate and an increase in the equilibrium quantity of loanable funds. In this essay I will argue in agreement with commentators, that the spending habits of the Canadian public can be blamed for high interest rates, resulting in the dramatic decrease in private savings.

Japan ranks as the third largest economy in the world as of 2010. The GDP at current prices in US dollars in Japan was reported at 5068.06 billion in 2009, according to the International Monetary Fund (IMF). Japan’s resurgence after World War II has however reached an inflection point in yearly 1989 after the burst of Japan’s asset price and real estate bubbles. As can be seen from the graph below, Japan’s GDP has hovered around the same level through more than 20 years of economic stagnation. The GDP’s slow growth has been exacerbated by the world financial crisis of 2008. A major landmark of Japan’s stagnation has been the BOJ’s fight against deflation.