2-25 - Macroeconomic Issues Japan Korea Taiwan Midterm 1...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Macroeconomic Issues – Japan, Korea, Taiwan Midterm – 1 hour, then HK and Singapore Today: Talk about macro, mostly about Japan, tie in with financial crisis Chart: Japan’s share of world output goes from 9% in 1958 to peak of 17% in 1990, then declines to about 14% in 2005. Share of world exports goes from about 1.8% in 1950 to peak of 10% in 1985, then declines to 5% in 2005 (decline ragged) Japan’s per capita income as a percentage of the US starts at 20% in 1950, rises to a peak of 85% by 1990, then declines to 70% in 2005. Data matches theory: Income convergence process But why has there been a decline? Chart: Countries’ savings rates Japan saves a lot of income (about 30%), most of it from household sector [Question: Why is the Norwegian ratio so high, almost equal to Japan’s? Also, why were savings rates so high in Canada, Australia, Sweden? (High rates for others probably because need to rebuild capital stock)] Japan does not have such high savings rates in pre-war period Reasons for high savings outlined in Hayashi’s article People got semiannual bonuses But, econometric data does not support bonuses as reason for savings Then created complex models of intergenerational transfers (Life Cycle Hypothesis) Idea: Filial piety, high housing prices, lead to high savings
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern