Inflation Rate Japan example essay topic

United States vs. Japan economic state. The United States of America is one of the world leading economic powers in the world. The question is, how does the Unites States compare to other nation powers. Australia, Canada, China and Britain are just a few of the nation powers that can compare to the United states. This report will focus more one of the main rivals to the United States and that is Japan. Here is just a sample of Japans Numbers for 2004 compared to the United States.

Unite States GDP growth is 4.30%, unemployment is 5.60% and Inflation Rate is 1.90%. In Japan the GDP growth is 4.50%, unemployment is 4.60% and Inflation Rate is -. 04%... I think this is an important perspective because we really do live in a global economy, and so are always in a very competitive struggle to retain our world economic leadership. The Gross Domestic Product is traditionally is very solid for the United States and Japan... Here again, the U.S. posts very good numbers.

Japan posted its country best GDP in the last 14 years with an outstand 4.5% growth... The size of the Japan economy is roughly one-half that of the U.S. economy. Japan's economy can grow much more rapidly on a percentage basis from its smaller base, even though the absolute dollar value of our growth is greater Unemployment has fallen to 4.6% down from a high of 5.5% in early 2003 for Japan. As in the United States unemployment has also fallen from the pervious year to 4.60%.

Inflation has the potential to erase the purchasing power of any wage gains if it is unchecked or eliminate any chance for wage gains if it turns negative and into deflation. The U.S. has reached the even level of inflation-not too hot and not too cold. The Japanese have endured a decade of near zero inflation, and as of 2004, a outright deflation. However, the Japanese economy shows signs of climbing out of its funk based on it strong GDP showing. Lets look at the Japan and United States Economics numbers for 2004. Currency: Japan uses the Yen, as The United States Uses the dollar.

Exchange Rate 12/31/04 US = $1 and Yen = 110.5. Gross Domestic Product (GDP, at market exchange rate) $4.8 trillion for Japan and for the United States it is $11.50 trillion for 2004. Inflation Rate (consumer prices) Japan actually as a deflation of -0.4% as the United States as a inflation rate of 1.90%. Current Account Balance (2004 F): $174.1 billion for Japan and the United States is 187.9 billion. Major Trading Partners for both countries.

: Germany, Asian NIEs, China, OPEC Merchandise Exports (2004 F): $522.4 billion for Japan and $630.57 billion for the United States. Merchandise Imports (2004 F): $395.9 billion for Japan and 647 billion for United States. Merchandise Trade Surplus (2004 F): $126.5 billion for Japan and for the United States it is $167 billion. Major Export Products for Both Countries: Machinery and transport equipment; chemical and other manufactured goods Major Import Products both countries: Chemical and other manufactured goods; machinery and transport equipment; mineral fuels; foodstuffs; crude material. One of the worst aspects of both countries current economic state is the deficit.

The United States is huge: $412 billion in fiscal 2004. That came to 4.3% of gross domestic product, one measure of the size of the U.S. economy. Before, I go over the Japenense's numbers, lets have a quick glance at a few other countries. In France, the budget deficit in 2004 was 3.7% of GDP and in Germany, 3.9%, according to the Organization for Economic Cooperation and Development (OECD).

Better but not hugely better. If you prefer euros to dollars, though, what's important to you is the projected trend in future deficits. According to the OECD, the budget deficit will drop to 2.9% of GDP in France in 2006 and to 2.2% in Germany. But it will stay almost steady at 4.2% in the United States. Score a point for the euro -- but definitely score one or more against the yen. Japan ran a government budget deficit of 4.5% of GDP in 2004, and the OECD is projecting the deficit will raise to 6.3% in 2006.

We all feel that the budget deficit is out of control in the United States, so why doesn't the comparison with Japan look worse? Economic growth in the United States is significantly higher than in the rest of the developed world -- and faster economic growth covers a multitude of financial problems. I will be using OECD projections, the U.S. economy will grow by 3.3% in 2005 and 3.6% in 2006 (in real terms, that is, after subtracting inflation)... Japan, is projected to show economic growth of just 2.1% in 2005 and 2.3% in 2006. And as my comparison of the economies and budgets of the dollar to that of the and yen should tell you; The United States, thanks to its faster economic growth rate, has more room to raise interest rates. The United States has the ability to raise interest rate without producing a recession unlike Japan with doesn't have that luxury.

So, yes, the U.S. dollar is headed lower, U.S. interest rates are headed higher and U.S. economic growth won't be as fast as now projected, but all this decline will stop well short of the dollar disaster that might produce a domestic or global financial meltdown.