Tag: Economy

The Economist 3/30

I like reading the Economist. Thanks to this journal, I can know about what is going on the  world. I will write what I am interested in from this week’s the Economist.

India Economy : Nobody doubts that China has joined the ranks of the great powers. But, nevertheless its huge potential, India does not show their strength so much.  In my opinion, as far as soft power is concerned, India is one of powerful countries.  While China is aging rapidly and worker’s population will decrease, India has relatively young and also growing. However, they have also several problem, such as the right of women, unstable periphery.      I would like to know more about this country which can become a great power undoubtedly.

Global Warming : Some Recent several terrible natural disasters may remind us Global warming may be one of reason. But some scientists are arguing that man-made climate change is not quite so bad a threat as it appeared to be a few years ago. It is difficult to judge whether this is true or not. However, we have already started several projects and we could not go back to. The world still needs to deal with it.

Heathrow Airport : Last year, when Britain’s government was being lobbied to revive controversial plan to expand Heathrow airport. For me, surprisingly, having predicted just before the financial crisis that 495m passengers  a year would want to use Britain’s airports by 2030, it now puts the potential damand by then just 320m. More than 100m would pass through British airport, however, we can tell how hard the financial crisis damage of this area. Among the developed countries, the number of passengers is expanding. I actually don’t understand the relation between the number of passengers and economic development. Why the number of passengers keep growing? Especially like in Britain, Japan, there seems to be few chance to grow.

The Economist give me the idea what I would like to know next. These topics are interesting. I will survey further.

Understanding Investments (3/24) 2

This is later part of 3. Starting with stocks.

There are 2 types of intermediaries in the financial market.

One type is broker who is simply helps buyers locate sellers and vice verse and arrange the sales. Broker may also help buyers and sellers agree on a price. The buyer or sellers pay a fee, or commission, to the broker for these services. If you want to invest in individual stocks, you will need to set up an account with a broker. There are human brokers, and there are online brokers that let you do almost everything yourself, at your convenience, or you can have some kind of mixture.

The other type of intermediary is a dealer, who also connects buyers and sellers but does so indirectly. Dealer announce to the market that they will a specified security to anyone who is willing to pay the dealer’s asking price, or the ask-price for short. At same time, dealers also announce that they will buy a certain security from anyone who is willing to sell at the dealer’s offering price, or the bid-price. When the dealers buys a share of stock from someone and then sells it to you, he or she earns the difference between the ask price and the bid price, which is called the bid-ask price.

We tend to buy things in standard quantities, called lots, and most financial investment have standardized lot sizes. For stocks, the size of round lot is 100 shares.

There are several different types of orders you can submit to the market.

A market order is an order to buy or sell at whatever the current market price is.

A limit order places an upper limit on the price you are willing to pay or a lower limit on the price you are willing to receive.

A stop-loss order is on order to sell shares that is triggered once the price of the shares falls below a certain level.

Understanding Investments (3/24) 1

3. Starting with Stocks.

I am going to divide this chapter the first half and the latter half.

Stocks can be pretty risky investments, but they serve as a great model for learning about individual investments and how to use them because the basic ideas behind stock investment are clear and easy to understand. In addition, the stock contract itself is very simple . Furthermore, the detail of stock investing are very similar to the detail of other types of investing.

When a firm issues stock, it divides the ownership of the company into thousands of equal part, which are individual share. Each share has an equal claim on the firm’s profit and an equal say in the management of the firm. The more shares you buy, the bigger the slice of company’s profits you receive, and the more influence you have on company decisions.

IPO (Initial public offering) : When a company sells its shares to the public for the first time, in a special sale called the initial public offering (IPO), it usually uses investor’s money to expand its business and start new projects.

Additionally, when one company buys another company, it often pays for this purchase by issuing new shares. Otherwise, firms are reluctant to sell shares; there are usually cheaper ways for firms to borrow form investors than selling share of stock. Therefore, most investors buy their stock from other investors not directly from firms.

The term Primary market describes the market buy directly their borrowers who issue them.  The term Secondary market describes the market for used.

Dividends are the profits that companies pay out to their shareholders. While it is true that stockholders are entitled to a share of the company’s profits, the company is not under any obligation to actually pay them out. Many corporations do not pay any dividends. When a firms earns profit, it has a choice.

1. It could pay the profit out to the shareholders.

2. It could hold onto the profits and reinvest them into new project.

The PhD factory

This is from article ‘Nature news’: The PhD factory

The world is producing more PhDs than ever before. Is it time to stop?

http://www.nature.com/news/2011/110420/full/472276a.html

The number of science PhD grew by nearly 40% between 1998 and 2008, in countries that are members of OECD. The growth shows no sign of slowing: most countries are building up their higher education systems because they see educated workers as a key to economic growth. But, is it time to stop?

Japan: The system in crisis.

Of all the countries, Japan is arguably one of the worst. In the 1990s, the governments set a policy to produce 10000 PhDs, trying to triple the number, which succeeded quickly. However, because they have limited seats for professors, academia doesn’t want them. And also, because Japanese companies want undergraduate students to train by themselves, Japanese companies neither.

China: Quantity outweighs quality?

The number of PhD holder in China grew from 10000 (1999) to 49000 (2008). But the main problem is the quality of student. Because of its rapidity, many PhD supervisors are not well qualified. And length of PhD training at three years is too short.

United States: Supply versus Demand.

The population of the people with science PhDs who get tenured academic positions in the sciences has been dropping steadily and industry has not fully absorbed the slack. The poor job market has discouraged some potential student from embarking on science PhDs. Some universities are now experimenting with PhD program that better prepare graduate student for career outside academia.

Germany: The progressive PhD.

Germany is Europe’s biggest producers of PhDs, producing around 7000 PhDs in 2005. Because they have long period experience for training PhDs, they developed progressive training system. Some PhDs seek for job in Academia in Germany. PhDs can also seek for the position in the rest of Europe, and also Europe companies are also interested in them. They are the best of the best.

I believe that Japan have to seek for Germany model. We should develop better PhD training system to satisfy demands of Asia academia and companies.

(See figures on source http://www.nature.com/news/2011/110420/full/472276a.html)

Asian economic ranking

From the economist article : A game of leapfrog

http://www.economist.com/node/21553498

From point of GDP, it is known Japan is third largest economy in the world, but by which means Japan is the 3rd happiest country in the world? It’s hard to say. Throughout almost all my life, I have always thought that why Japanese economic hasn’t revitalized? What is point? I want to tell you later but today, I want to share the fact which is less known. This is review recent article from the Economist.

For years, Japan was Asia’s richest and most powerful economy.  It was the first Asian economy to industrialize, and the emerging Asian tigers Hong Kong, Singapore, South Korea, Taiwan and late China – merely followed in its tracks. Now, however Japan is steadily overtaken.

It is less known that Asia’s so-called newly industrialized economies (NIES) are, one by one, becoming richer than Japan. Most economist reckon that the best way to compare living standard is to take GDP per person measured at purchasing-power parity (PPP), which adjust for difference in the cost of living in each country. You know, the cost of living in Tokyo is the most expensive in the world 2012. Compare to New York City 33th and Shanghai is 16th. (See figure on source: http://www.mercer.com/press-releases/cost-of-living-rankings )

Cost of living: http://www.mercer.com/press-releases/cost-of-living-rankings

On this gauge, Japan was overtaken by Singapore in 1993, by Hong Kong in 1997 and by Taiwan in 2010. And South Korea will be richer than Japan soon. This is surprising, because in 1980, South Korea’s GDP per person was barely a quarter the level of Japan’s.

Now, Japanese prime minister is Shinzo Abe. He is famous for his policy of economics called Abenomics. Thanks for expectation for Abenomics, now stock price of Tokyo market has increased and the price of yen has decreased, which are good, will help Japanese economy later. But, the issue is Abenomics is going to introduce inflation target 2 percent. I am not sure whether or not inflation suits for Japanese economy. I said the living cost in Tokyo is the most expensive in the world already. If your salary is stable but the price of product increase, it is hard to live. And also it is important that inflation rate should be stable. Does this work?

Even it seems we have had hard time. For people in the world, Japanese economy is one of most important model. It is because Japanese economy has experienced Modern Industrialization, Bubble economy, and Aging society in advance any other country in the world.  Let’s thinks about the future of Japanese economy.