Group items tagged

Corn and Soybean prices fell as buyers are moving away from American producers to suppliers in South America such as Brazil and Argentina. Due to the declining demand, there will be allocative inefficiency and supplier's surplus with American corn and soybean. The equilibrium is not achieved, however the price mechanism could perhaps self-right the graph by lowering price and allow the supply to be harmonious with demand.

In the article author describes the world trade between the countries - exports. Exports are one of the four components of GDP. In comparison to the 2011, the exports in 12 largest countries declined in 2012. Only US, China and Canada had an insignificant growth last year. Declining incomes are the main reason for low consumption, consumers keep purchasing less imports. Author also considers difference between exports in 2008 and 2012. German exports fell by three percent, while Indian exports were 50 percent higher. It is a huge difference, but if one remembers the reasons for changes in net exports from the chapter 14, it is not that serious. The last reason was the difference in inflation, i.e. "if inflation in the US were relatively higher than in Canada then US goods would be less competitive in Canada and may reduce the export revenues which the US earns from its exports to Canada. " Thus, looking at India and Germany this difference in growth is justified.

The author of the article talks about Indonesia. It focuses on the attempts of central bank of Indonesia to defend the rupiah, "which has slid some 12 percent so far this year amid a global emerging markets rout." The currency has fallen to its weakest levels since April 2009, as worries about the country's current account deficit and high inflation rate have sparked a sell-off of Indonesian assets. Sudden declines in rupiah and local stocks over the last week, necessitated central bank to take part. Emergency fiscal and monetary policies that were announced last week, had done little to improve the current situation. Therefore, currently to protect its currency, Indonesian central bank attempts to raise the rates.

House prices in the UK have fallen for the third month in a row. Although the government has supported in mortgage borrowing, but the consumer's uncertainty surrounding the economy and their ability to afford the houses still causes the decrease in price in the market. The increase in demand is believed to be driven by seasonal factors compounded by the Olympics. It is believed that the house prices will continue to decrease slowly over the remainder of the year. There is also the first decline in supply in September after seven months of growth. I think this article fits perfectly under the topic of demand. The basic law states that as price falls, the quantity demanded of the product will usually increase. However, this does not fall under the basic law behind the demand curve, but it indicates that price of houses have fallen as a result of an increase in demand. The Europe's economy isn't doing very well at the moment and it causes more hesitant in how they consumers choose to spend their money. Price may be low, but they may choose to spend their money elsewhere. This does, however, support the supply law. As price falls, the quantity supplied is dropped. Suppliers wouldn't want to produce or supply to any products that isn't very well demanded.

Income Elasticity of Demand This article explains about pet burial business suffering because of economic recession. The business' revenue dropped from "$47.7 billion" to "$45.5 billion" within one year in the United States. The article claims, its' revenue dropped because of recession. This article is good example of how knowing Income Elasticity of Demand (YED) can be used to predict the economy of the country. Considering pet burial is luxury good, it has very high YED. The decrease in quantity demanded of the product indicates the general income of the country decreased.

The ocean is one example of a common access ground. It's not exactly owned by anyone. The ocean is being explored more and more everyday. One way is through fisheries. The rapid increase in demand for fishes has led to the sudden decline of the fish populations. Take Bluefin tuna as an example. The increase in demand for tuna sushi has led to a huge depletion worldwide for the past 15 years. This has also led to an increase in price as the populations are becoming more rare. A Bluefin tuna once sold for more than £1m at a Tokyo auction. It is said that most of the tuna caught are shipped to Japan for consumption. Since the ocean has international access, coming up with regulations need to be communicated among many countries. 48 member nations of International Commission for the Conservation of Atlantic came out and voted to maintain strict catch quotas. This relates to the tragedy of the common. Anyone can access the ocean and catch as much fishes as they like. They only take into account the money they can gain from catching more tunas. This shows a lack of consideration of the generation where some are only concerned about themselves. Without strict regulations, the population of tunas may become extinct in the near future.

It is a very interesting article because many people doesn´t know about the problem with the fish population. We are depleting all the oceans and we don´t think about the consequence of our acts. The problem is that we are really selfish because no one care about the future generation. We will leave them a completely depleted world (this idea is very present in the film Avatar) However it is very difficult to control the people from capturing too many or too small fishes or other animals. It is a tragedy of commons because it is the depletion of a shared resource by individuals, acting independently and rationally according to each one's self-interest, despite their understanding that depleting the common resource is contrary to the group's long-term best interests.

The article discusses how during recessions, the rich become richer and how the businesses cycles still disadvantage the poor and benefit the rich. During recessions, income inequality increases and favors those who are wealthy. As unemployment rises, many people see a significant decline in their income and saving abilities. They are no longer able to afford common resources. For example, people will need to sell their business, houses… This leaves the rich buy up such resources for a cheaper price. This is what keeps the rich constantly "on top" and the poor even poorer. There is a chart which really illustrates this statement put forth by the author.

I think it's funny to see how rich people can get even richer during recession.

This article talks about how the top 1% doesn't get affected by recessions and actually gets richer while the poorer get poor. This came as a surprise to me as I thought recession always had a negative effect on the incomes of the population, but obviously this isn't true. The article states since the recovery period of 2009, the bottom 99% of workers incomes decreased by 0.4% while the top 1% workers income raised by 11.2%, an enormous amount during a recession. In my opinion I think this might be because of the increase in black market activity during a recession, due to the fact that the richest people in the world have earned their income, one way or another, through illegal activity.

This article's talking about Thailand's economic growth in the last three months of 2012 that it was recovering from the previous year's floods and had increased a lot more than what expected. On October-December period GDP had surged 18.9%, which most analysts had forecast a figure close to 15%. If we compared with the previous quarter, the economic grew by 3.6%, so we can say that even though last year the floods had impacted on many factories, but Thailand's government implemented different ways to help stoke domestic demand in an attempt to offset the decline in exports and sustain growth in the economy.

Central Bank of Russia will continue to cut interest rates to 8% at which central bank lends to commercial banks. This target is to be completed in early May. This action is done in the hope to boost Russia's economy after a slow down. In addition, inflation rates are beginning to decline. Lower interest rates will lower costs of saving and thus encourage people to invest or get a loan to consume goods such as houses. This will move aggregate demand outwards and as well ad economy's potential output. This, in turn, will encourage economic growth. As such, this method can be classified as a part of an expansionary monetary policy or reflationary policy.

Oceans are one of the Commons, and as any other commons, it becomes overconsumed. Fishers all around the world keep devastating populations of the fish. To prevent overfishing, pollution and other human impacts, leading international marine scientists are proposing radical changes in the governance of the world's oceans. They carried an experiment in Chilie, and based on it, scientists state that they would be able to help to reverse "the tragedy of the commons". Problems in Chilie made people be open to new arrangements, scientists and fishers began working together to improve the situation with fish. By working together for some years, scientists became able to reveal about fish stocks and and the surrounding marine ecosystem. The new laws gave exclusive ocean territories to local 'artisanal' fishers, and excluded the big industrial fishing fleets, which had their own exclusive fishing zone. Scientists and small fishers then worked together to understand and rebuild the shattered fish stocks in their zone, leading to a shared vision and voluntary agreements on how to manage them.

I find this article particularl interesting because due to a political change in Chile, it has now effected the common resource tradegy of the Oceans. It has reduced the over fishing in Chile, which has let the fish start to regenerate. The research has found out that the key to managing the fisheries depends on making decisions flexible enough to cope with the changes that the ocean goes through.

I find this article particularl interesting because due to a political change in Chile, it has now effected the common resource tradegy of the Oceans. It has reduced the over fishing in Chile, which has let the fish start to regenerate. The research has found out that the key to managing the fisheries depends on making decisions flexible enough to cope with the changes that the ocean goes through.

This article talks about the decline in deforestation in Brazil of the Amazon. It states that the deforestation in brazil has decreased dramatically from its peak in 1995, at 30 000 square km per year to 4656 square km this year. Although this doesnt seem as alot of space..its actually the size of The New York state. This has all happend due to the rising awareness of the Government to preserve the Amazon. Althoigh enviromentalists are still not completelty happy because the Brazilian government recently signed an agreement in favor of the farmers cutting down trees to increase agriculture. The Brazilians government is planing to reduce deforestation to 3925 by 2015. this is a market failure because by cutting down trees it affects the oxygen levels in the atmosphere increasing the effects of global warming.

This article talks about how the unemployment is affecting the United States and how it is related to a decrease in the aggregate demand of the country. And how this possibly causes the real GDP being 6 percent under the trend path.

This article tells us how the recession in the United States has affected the unemployment rate; people consume less thus the aggregate demand is lower and remains like this as unemployment increases. I also found important something that is mentioned: "During a deep recession, more workers move into the category of those who take a long time to find new jobs, and so the decline in unemployment across the labour force as a whole is quite slow" Factors mentioned in this article are what determine the real GDP to be 6% under the trend path.

The coral reefs in Sweden is an important common resource where it provides habitat for many marine life and maintains biodiversity. However increased human activities such as trawling and eutrophication has caused the number of coral reef sites from 3 to 1 and the last remaining site is in bad condition. Coral reefs, once damaged causes many of the species of marine life to disappear and extremely difficult and time staking effort is required to restore. This is an example of "tragedy of commons" and adequate measures must be made to prevent further tragedy from happening.

This article talks about the decline in coral reefs due to a virus affecting their growth. This is a huge problem for the oceans because coral reefs support around and estimated 75% of all sea life and with out them, well we wouldnt have any fish to catch. So the survival of corals in our seas is absolutely essential.

The cement company Lafarge, says that UK faces a 200 million tonnes shortfall due to slow planning procedures. There is an extremely high demand currently in the UK. If this continues or increases, then the countries capacity to supply will begin to decline after 10 years. Out of the 200 million tonnes, only 60 is recyclable which leaves the rest to be extracted from primary sources. Since the procedure to quarry materials from primary sources requires authority permission, the process is very slow. This slow process is going to create the shortfall says Lafarge.

Singapore's labour productivity- defined as average output per period of time- fell by 2.6 percent in 2012. This includes the manufacture sector, construction sector, and service sector. Only the information and communicators sector show a positive increase. Labour productivity has been decreasing continuously. In the fourth quater of last year, labour productivity fell by 2.5 percent, which is the fifth consecutive quater showing a decline. The numbers attribute to the slower economic growth in the past two years. The government has been trying to increase productivity in certain sectors that see the most potential increase. Not only that, nominal wages- wages not yet adjusted for inflation- shows a 2.3 percent increase. Unemployment rate is 2%. The article can be related to aggregate supply. If labour productivity sees a decrease, it is likely that aggregate supply falls as well since labour is one of the factor of production. If the country sees a fall in its output then this suggests a decrease in the growth of the economy or may even reflect in the country's GDP value. Not only that, an increase in wages will also increase firms' cost of production, and therefore contribute to a fall in aggregate supply. However, on a good note, its unemployment rate is at 2%, which is considered as quite a good rate. This may suggest a quite full working capacity of the economy.

The most recent searches by Rabobank say that commercial wine are at their lowest prices in over a decade. Many wine companies globally have had to tighten their supply. The tighter supply situation has eliminated much of the unsustainable competition that had been undercutting pricing. Markets that do not pay much for bulk wine will be outbid by markets that will pay higher prices. Europe will see decline in imports, and therefore also consumption of wine. I found this article interesting because there are quite a few non-price determinants shifting the supply curve and therefore changing the market price equilibrium. This article sums up many concepts that we have learned over the past 6 weeks.

American car sales are declining, which can be at the cause of the falling economic situation in America. They need more people to develop the products and the quality of the car somehow decrease, which cause of the fall of demand. I think it's relate to scarcity because the existing oil on earth is about to run out, so the price of oil rise in recent years. Then more and more people would like to take public transportation instead of car. In a word, the decrease of demand is the main cause of the sales falling of the car. Moreover, I believe Ford should think about why the Europeans are not interested in Ford now? Ford do need to do something for keeping their products stand in the European market.

Although this article focuses on protectionism, in my opinion trade barriers come along. The WTO has lately noticed of an economic and trade slowdown because ofprotectionism, the global trade growth is estimated to decline from 5% to 4.5% next year which is alarming due to the fact the world's economy needs to recover. The article also talks about how trade protectionism is becoming more difficult to fight because it is difficult to fight because of the complexity and because its coming in different ways that we are not used to (for example:tariffs and export subsidies), and more and more regulations are being imposed each day.

As my fellow peer said this article is a perfect example of why protection policies shouldnt be used in some cases. The article states that due to trade protectionism policies the estimated anual growth will decrease from 5% do 4.5%! What should really happen is that countries should decrease their protectionism policies, let the economy gain a bit a stamina,in order to recover from the recesion, and only then increase protectionism once the economy has recovered and is growing.