Debt and fiscal policy

Government debt as a percent of GDP, is the amount of national debt a country has in percentage of its Gross Domestic Product. Although Japan is a country considered developed, it has quite a large amount of depts. Research tells us that from 1980 to 2011 the average debts was around 112%. The last years amount was nearly doubled, perhaps it arrived up to 211% of the GDP. The information brings up to the conclusion that with the evolving of the economic and financial crisis, Japan's debt increased in order to keep up its development.

Japan's fiscal policy is expansionary, which means that taxes are reduced and government spending is increased. The japanese government feels it is better for its countries economy to fight national debt to increase the C and I factors (Household consumption and Investment). Graphically speaking, the Aggregate Demand would have a shift to the right

Japan...

For my economy class, our teacher decided to assign my classmates and I an already developed country to analyse. What a better occasion than this to know about a new place and its economy?

The information is all above in the table. The data collected considers only the last 5 years: starting from 2008 up to July of 2013, even though some information has not been possible to find. First of all, we can see a great increase in government expenditure in a 3 years time until 2011. This branch, together with the government debt, is the only ones who have an increase over time that is partially linear, as they have no sorts of decreases. The investment expenditure, also known as “I”, demonstrates the money invested in the economic circular flow. The data makes us understand that the “I” is in average around 88 billions, due to its rises and falls. The Real GDP Growth is the more inaccurate in sense of equilibrium. In fact, in 2008 it is reported to be negative 1.0 billions, while in a 2 years arc time, it becomes positive for 4.7. Though in 2011 the Real GDP Growth goes back to negative.

The most important thing we had to highlight was the GDP, since it is the topic discussion of our last 4 classes. It seems to be that the GDP has a mean of 42 billions. From our GDP and the Household Consumption, we can easily get the “GDP per capita” with the formula: GDP/Household Consumption.

Taking a closer look to society we can get important information that helps us understand more about work and consuming. The unemployed rate seems to get a significant decrease over time. Perhaps, in 2011 those who had no job were about 4.6 billion while in July 2013 it seems there are 3.8 billion. Therefore there are nearly one billion people who found job. Apart from the working point of view, there is a great increase in consuming from the household. This brings us to the idea of a trustworthy economy.