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The GDP of Japan


Executive summary

Gross Domestic Product of Japan

The GDP of Japan in 2011
Graph of GDP of Japan in a decade
Business cycle and economic development of Japan in 2000s

Trends in Japanese government expenditure in the recent years


Executive summary
Gross domestic product is used to measures economic growth and development of a country. Emerging economies in the world are noted to record high growth rate in their gross domestic product. This paper discusses the GDP of Japan by putting the country in the context of an emerging economy. In the first section, the paper explains the meaning of GDP, and why Japan is considered an emerging economy. In the second section, the paper breaks down the real gross domestic product of Japan for the year 2011. In addition, the trend of Japan’s GDP for the past decade is presented. In the last section, the paper analyses the trend of economic development of Japan over the past one decade. In addition, government expenditure in the past three years is reviewed.

Question 1
The GDP of Japan – emerging economy
Gross Domestic Product, commonly abbreviated as GDP, is used as the measure of economic growth and development for national economies. It is also called the Gross National Income (GNI). The GDP measures the national income of a given country. In essence, Japan is a manufacturing economy and is considered as one of the most competitive economies in the world today. Japan competes with the United States economy and other developed economies in Europe such as the United Kingdom[1]. Japan is one of the largest economies in the world in terms of production of goods. It comes third after the United States and China respectively. However, for the purpose of this report, Japan will be considered as an emerging economy because of the recent flops in its economy. It is not considered as an economy that is coming from scratch, but rather, from an economic downturn. This view is taken from the assessment of the Japanese economy in the year 2011 by the Bank of Japan.
Question 1
According to the World Bank Group, the economy of Japan has been showing positive economic outlook and coming out of the economic witnessed two years earlier. This view is based on a number of economic indicators that were noted in the year 2011 by the Bank of Japan. These indicators include the recorded rise in the overall production, as well as increased exports. These two indicators are the major signs of a performing economy[2]. With an increase in production and exports, the country is often on the positive side of balance of trade and balance of payments. Prior to the recent positive developments in the Japanese economy, the economy suffered due to a strong currency – the yen. The strong yen has been causing a shrink in exports by Japan. Though slightly recovered, the economy of Japan is still being affected by deflationary forces. However, strong monetary policies are aiding in cushioning the economy thereby putting it back on track[3].
Question 2
Gross Domestic Product of Japan in 2011
The GDP is calculated through the addition of the total sum of consumption expenditure, added to the total investment expenditure, plus the government expenditure, minus the net exports. This can be represented as [GDP = C + I + G + (X-M)]. The net export is the difference between exports and imports and is a very important segment of the GDP formula. It determines the real worth of the economy relative to the international economy. The GDP is calculated on an annual basis. This is done after a cycle of 365 days, and it marks that total expenditures for both the final products and services produced and consumed by the country.
The GDP of Japan in 2011
In the year 2011, the Gross Domestic Product of Japan totaled to 5867.2 billion United States Dollars. This is according to the figures availed by the World Bank. The GDP of the country was at 8.87 % of the GDP of the entire world economy. This according to the World Bank group 2012 denotes one of the highest preforming economies in the world.
i.Private consumption expenditure
The private consumption expenditure of Japan stood at 282.7263 trillion Japanese yens. This was boosted by the growth in the income of households due to a strong economy and positive prospects of growth[4].
ii.Investment expenditure
The total public investment expenditure of Japan stood at 0.2 trillion Japanese yens[5]. The government of Japan leads in the investment initiative within the country. The government spends a lot while investing in research and development within the country.
iii. Government expenditure 2011
The total government expenditure in Japan in 2011 was 96.7 trillion Japanese yens. The expenditure of the government is high because the government focuses on two major dimensions of investment. These include investment in research and development, as well as real projects[6].


Total exports for Japan in 2011 were 800.8 billion US dollars. There was a growth in from the previous year due to increased trade relations between Japan and major trading giants in the world like China.


The total imports into by Japan in 2011 were 794.7 billion US dollars. A high percentage of its imports came from China, which is one of its biggest trading partners.
Question 3
Graph of GDP of Japan in a decade
The figure below is a graph of the GDP of Japan from the year 2000 to 2012. From the Graph, it is notable that the economy of Japan has been experiencing an increasing trend in economic growth. This is denoted by the increase in GDP each year from the year 2009 to the year 2012.
Source: The World Bank, 2012.
Question 4
Business cycle and economic development of Japan in 200s
The characteristics of an emerging economy are usually denoted in the measures of GDP within that economy. These include the investment expenditure, consumption expenditure, government expenditure, and the net exports of that country. Increase in the production and exports are major milestones in economic development. As for Japan, there has been a notable increase in production as the economy picks up from the stagnated growth experienced due to economic shocks. Also, the country has worked on maintaining and even increasing the export of its manufactured goods mostly electronics and automobiles. This has helped to maintain a strong balance in the balance of trade records of Japan.
Trade is the main basis on which economic development is always pegged. Therefore, a country that shows prospects of having a strong economy must be very active in international trade. Japan is indeed an icon not only in manufacturing, but also in the real global trade. Japan has been keeping a strong presence in the international market. Japan has maintained the production of standard goods that meet the demands of the market. This helps in sustaining and maintaining the country within the competitive markets. Japan has managed to penetrate the world’s strongest markets like the United States, Europeans Union and the ASEAN market. Japan is also penetrating the new and promising regional markets of developing economies like Africa, South America and Asia. As of today, Japan has established strong and sustainable trade relations with many countries in the entire continents of the world. With more prospects of raising its production potential, Japan will undoubtedly become of the strongest economies in the world in respect to GDP.
Japan can fall in the top group of countries in the word that are heavily investing in technological development. The high investment in technology is the reason why the company is innovative enough to produce varied and high quality products. Technology has sustained the manufacturing sector of the Japanese economy helping it match with such sectors belonging to the most economically competitive countries.
Question 5
Trends in Japanese government expenditure in the recent years
The public expenditure is a very important aspect in economic development of a state. The public spending is dictated by various factors including the economic targets and challenges facing the country. In general, Japan has been witnessing a high rate of government expenditure in the economy. This is in order to keep the economy at par with the other developed economies. The expenditure by the Japanese has accelerated from the year 2008. This is partly because of several economic situations and conditions that have been hounding the nation. The first reason for the increased expenditure by the Japanese government in the recent times is the worldwide economic recession. The government had to cushion itself for the shocks of the recession. One way of doing that was to make the economy considerably proactive. This would enable it to develop strengths to mitigate the economic shocks arising from the international financial market. The other factor, which has led to the rise in government expenditure, is the natural disaster that rocked the country in early 2011. The government had to release a lot of money in the economy to help in mitigating the effects of the disaster to the economy of Japan[7].
Japan has one of the emerging strong economies in the world despite the numerous challenges to the economy. The GDP of Japan is projected to attain more growth in the coming years basing on the trends that have been witnessed over the past five years.
[1]P, Mourdoukoutas, The new emerging Japanese economy: Opportunities and strategies for world business, Thomson/South-Western, Mason, Ohio, 2005, p 25
[2]P Mourdoukoutas, The new emerging Japanese economy: Opportunities and strategies for world business, Thomson/South-Western, Mason, Ohio, 2005, p 28
[3]BBC News, Japan’s economy emerging from lull, says Bank of Japan, 2011,retrieved 14 August, 2012.
[4]Organization for Economic Co-Operation and Development (a), Private Final Consumption Expenditure in Japan (JPNPFCEQDSNAQ): Main Economic Indicators, 2012, retrieved 14 August, 2012.
[5]Organization for Economic Co-Operation and Development (b), Government Final Consumption Expenditure in Japan (JPNGFCEADSMEI):Main Economic Indicators, 2012, retrieved 14 August, 2012.
[6] Ibid
[7]RLSexton, Exploring Macroeconomics, Cengage learning, Mason, Ohio, 2012, p 34

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