Thursday, February 15, 2007
Consumers boost Japan's economy
Resurgent consumer spending helped Japan's economy to grow faster than expected in the last three months of 2006, government figures have shown. Japan's gross domestic product (GDP) grew by 1.2% in the October to December period from the previous quarter. Consumption, which makes up half of Japan's gross domestic product, was up 1.1% on the same period a year ago.
Policymakers raised the level of borrowing by a quarter point to 0.25% last July, ending Japan's long period of zero rates. All economic data is being scrutinised for clues as to whether the Bank of Japan will raise interest rates at its meeting next week. While Japan's government prefers low rates to keep the economic recovery on track, other countries are demanding a rise to counter weakness in the yen.
Read the full story at: http://news.bbc.co.uk/1/hi/business/6363791.stm
The Japanese economy has been for some time the victim of the "liquidity trap" and effectively zero interest rates - and the consequent ineffectiveness of monetary policy instruments in lifting the economy out of recession. Strong consumer spending is now beginning to lift GDP, hence the note of caution as to the effects that an interest rate rise would have at this stage of the recovery.
The much acclaimed new interactive learning package LiveEcon can help you understand the economics behind these important policy events. The composition of gross domestic product is examined in chapters 2 and 3 and the liquidity trap in chapter 11 at intermediate level. Find out how to get LiveEcon at www.liveecon.com Download this blog as a Blogcast via the website.
Resurgent consumer spending helped Japan's economy to grow faster than expected in the last three months of 2006, government figures have shown. Japan's gross domestic product (GDP) grew by 1.2% in the October to December period from the previous quarter. Consumption, which makes up half of Japan's gross domestic product, was up 1.1% on the same period a year ago.
Policymakers raised the level of borrowing by a quarter point to 0.25% last July, ending Japan's long period of zero rates. All economic data is being scrutinised for clues as to whether the Bank of Japan will raise interest rates at its meeting next week. While Japan's government prefers low rates to keep the economic recovery on track, other countries are demanding a rise to counter weakness in the yen.
Read the full story at: http://news.bbc.co.uk/1/hi/business/6363791.stm
The Japanese economy has been for some time the victim of the "liquidity trap" and effectively zero interest rates - and the consequent ineffectiveness of monetary policy instruments in lifting the economy out of recession. Strong consumer spending is now beginning to lift GDP, hence the note of caution as to the effects that an interest rate rise would have at this stage of the recovery.
The much acclaimed new interactive learning package LiveEcon can help you understand the economics behind these important policy events. The composition of gross domestic product is examined in chapters 2 and 3 and the liquidity trap in chapter 11 at intermediate level. Find out how to get LiveEcon at www.liveecon.com Download this blog as a Blogcast via the website.
# posted by Sam @ 11:57 
