Comparative Economic Analysis of Japan and Italy

Proponents: Lopez, Art Jones Malinao, Jaymark Makinano, Caryl

Mondano, Gianne Cielo Otacan, Kiezzyll Jane

Data of GDP Growth Rate (in %)

Year 2002 2003 2004 2005 2006 2007 2008 2009 2010

Japan -0.3 2.7 2.9 2.6 2.2 2 -0.7 -5.2 3.9

Italy 0.4 0.4 1.3 0.1 1.9 1.4 -1 -5.1 1.3

2011

-0.7

0.4

Sources: http://www.indexmundi.com/g/g.aspx?c=ja&v=66 http://www.indexmundi.com/g/g.aspx?v=66&c=it&l=en

Comparative Economic Analysis (CEA) of the GDP

Japan had a contraction in its economy during the years 2002, 2008, 2009 and 2011 in achieving negative GDP growth rates while Italy has economic contraction during the year 2008 and 2009. According to Todaros principle, Japan and Italy did not

achieve economic growth. Both countries achieved growth rates which are below 5% annual increase.

Data of Unemployment (in %) Year 2002 2003 2004 2005 2006 2007 2008 2009 Japan 5.4 5.3 4.7 4.4 4.1 3.8 4 5.1 Italy 9.1 8.6 8.6 7.7 7 6.2 6.8 7.8

2010 2011

5.1 4.6

8.4 8.4

Sources: http://www.indexmundi.com/g/g.aspx?v=74&c=ja&l=en http://www.indexmundi.com/g/g.aspx?v=74&c=it&l=en

Comparative Economic Analysis (CEA) of the Unemployment

Italys unemployment rates during 2002 -2011 are all higher than Japan. Japans unemployment rates are in stable level compared to Italy. According to Schiller, a country should have unemployment rate between 4% to 6 % to achieve fullemployment, where the unemployment is compatible with price stability. Japan achieved full-employment during from year 2002 to 2011 except for the year 2007 where the unemployment rate is below 4 %. Italys unemployment rates from 2002 to 2011 are all higher than the maximum of 6% where full-employment can be achieved. Italy did not achieve full-employment from the year 2002 until 2011.

Data of Inflation (In %)

Year 2002 2003 2004 2005 2006

Japan -0.9 -0.3 -0.1 -0.3 0.3

Italy 2.4 2.7 2.3 2 2.3

2007 2008 2009 2010 2011

0.1 1.4 -1.4 -0.7 -0.3

1.8 3.4 0.8 1.4 2.9

Sources: http://www.indexmundi.com/g/g.aspx?v=71&c=it&l=en http://www.indexmundi.com/g/g.aspx?v=71&c=ja&l=en

Comparative Economic Analysis (CEA) of the Inflation

Japan attained deflation from year 2002 to 2005 and from the year 2009 to 2011. On the other hand, Japan achieved stability of prices from the year 2006 to 2008 according to Schillers theory. According to Samuelson, Italy achieved stability of the prices from year 2002 to 2006, as well as the years 2008 and 2011. Italy had a better stability of the prices between Japan and Italy.

Data of Balance of Payments (in Billions of US dollars)

Year
2002 2003 2004 2005 2006 2007 2008 2009 109.13 132.22 167.27 160.91 165.76 206.46 151.17 137.20

Japan
-9.45 -16.74 -14.28 -28.11 -45.46 -48.63 -77.02 -65.26

Italy

2010 2011

198.95 119.56

-77.37 -66.36

Sources: Japan BOP http://books.google.com.ph/books?id=o_Tx8Cf3h3sC&pg=PA528&dq=Balance+of+pay ments+japan++2005++%22Analytic+presentation,20022009%22&hl=en&sa=X&ei=OQMPU7r0C4m5iQeShYH4Dw&ved=0CCsQ6AEwAA#v=onep age&q=Balance%20of%20payments%20japan%20%202005%20%20%22Analytic%20pre sentation%2C2002-2009%22&f=false http://books.google.com.ph/books?id=FxFwAgAAQBAJ&pg=PA534&dq=Balance+of+pay ments+japan+2012+%22Analytic+presentation,20052012%22&hl=en&sa=X&ei=suAOU4_BEsqfkwWe1YGoDg&ved=0CCwQ6AEwAA#v=onep age&q=Balance%20of%20payments%20japan%202012%20%22Analytic%20presentatio n%2C2005-2012%22&f=false
Italy BOP http://books.google.com.ph/books?id=o_Tx8Cf3h3sC&pg=PA514&dq=Balance+of+pay ments+italy++2005++%22Analytic+presentation,20022009%22&hl=en&sa=X&ei=VgMPU6CTG8H6iQey6YHIBg&ved=0CDYQ6AEwAA#v=onepa ge&q=Balance%20of%20payments%20italy%20%202005%20%20%22Analytic%20prese ntation%2C2002-2009%22&f=false

http://books.google.com.ph/books?id=FxFwAgAAQBAJ&pg=PA522&dq=Balance+of+pay ments+italy+2012+%22Analytic+presentation,20052012%22&hl=en&sa=X&ei=geEOU9KSCYm8kAXsmYGYDA&ved=0CCoQ6AEwAA#v=onep age&q=Balance%20of%20payments%20italy%202012%20%22Analytic%20presentation %2C2005-2012%22&f=false

Comparative Economic Analysis of the Balance of Payments

The Balance of Payment conditions of Japan during the years 2002 until 2011 are all surplus thus making their BOP favorable while compared to Italy having deficits through-out those years. Japan received more payments than payments made to other countries. Italy, on the other hand, made payments to other countries than payments received thus making their BOP a deficit and unfavorable condition. Japan has more currency that flowed on their country during 2002 2011 compared to Italy.

Summary

Japan had the most negative growth rate during the year 2009 which makes the country's unemployment rate increase resulting to a deflation on the prices which also had the highest deflation rate as seen on the data of inflation of 2009. Japan's BOP condition from the year 2002-2011 is a surplus and favorable to the country's economy. But in the long term, Japan needs to encourage their people to spend more. Compared to Japan's production during 2002- 2011, Italy 's production is lower. Because of the low production, only few jobs were offered to the people. As seen on the data of unemployment of both countries, it is evidenced that Italy's unemployment rates are much higher than of Japan's. The income of the people will be lower and makes their purchasing power low as well which the prices is also affected. Italy's BOP condition is deficit and unfavorable throughout the years 20022011.