• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Economics Commentary

Extracts from this document...

Introduction

Portfolio Commentary Economics Commentary Number: HL Number 1 Title Of Extract: "Criss-crossed capitalism" Source Of Extract: The Economist Date Of Extract: 6/11/2008 Word Count: 713 Date The Commentary Was Written: 19/11/2008 Sections Of The Syllabus To Which The Commentary Relates: 2.1, 2.2, 2.3ii Candidates Name: Esteban Gutierrez Aparicio The collusive1 market structure that the Japanese traditional industry has traced over previous years has increasingly become to fail. The tendency of companies abandoning cross-shareholdings2 has generated a in deep economic loss resulting from a reduce in the total revenue of corporations in the country. The attempt of industries such as steel, paper and energy as well as car making companies and electronic firms3 to consolidate economic partnership through means of oligopoly, has decreased deliberately from 50% of the market values to 20% over the last 17 years. ...read more.

Middle

As the extract mentions, there is a bought share between companies to prevent the overhaul of others and to regulate the number of firms within the market as it happened with Mitsubishi when 11 other companies had an acquisition of shares to "block the outsider". As these companies were subdued to price controls of the industry, the demand curve will therefore be highly inelastic responding to the few amount of substitutes5 that the industry seeks to have in flow. However the concerns about the crumbling of the traditional tendency of cross-shareholding are given with the results in the change of behavior of the industry. Along with the abandonment of share holding companies, the industry becomes vulnerable to external entry and in the case of Japan foreign investments which increases competition. ...read more.

Conclusion

Quantity produced also lessens from Q1 to Q2 as costs of production are directly proportional to the loss of profit6 with the diminishing prices. Due to price decline, total revenue also decreases as both quantity and price of products decrease considerately. The impacts of this phenomenon on Japanese economy is illustrated with losses of the questioned firms. Between March and September more than 160 shareholding companies lost a total of �300 billion in value. 610 Banks and monetary institutions have also been affected as these companies are part of the essential capital they lend against. Despite the increase in cross-shareholding companies since 2004, the evident economic impact of the "criss-crossed capitalism" are starting to arise. The Japanese government in response has been working on regulatory measures to prevent this phenomenon future repercussions. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our International Baccalaureate Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related International Baccalaureate Economics essays

  1. Extended Essay Economics

    A firm whose products have elastic demand will face significant changes in the quantity sold if they adjust their prices and so they will be in a much more difficult position.

  2. Economics HL - IA

    Firstly, if the economy is growing at a very fast pace, it is likely that, in Diagram 2, the AD� would shift upward. The SRAS curve wouldn't shift, however, because the higher interest rates haven't discouraged investment sufficiently. On the other hand, if the ECB intervenes, unemployment will rise further.

  1. Macro Economics Notes

    = 110 000. Calculate GDP at market prices and GDP at factor cost Profits received by Turkish citizens on investments made overseas 80 000. Profits repatriated from turkey 70 000. Therefore, GNP = Income method Income from employment = 900 000, income from self employment = 260 000, private sector

  2. Economics Commentary

    The EU has sent some 500 million Euros in aid to Pakistan since 1976, according to the European Commission, and has quadrupled its funding for the 2007-2010 period, with 50 million euros (65 million dollars) earmarked so far. Powered by Indiatimes About Us | Advertise with Us | Terms of Use | Privacy Policy | Feedback | Sitemap Copyright (c)

  1. Economics Commentary Topic-: Who will prove cartels in steel?

    The finance minister of India P. Chidambaram said that the government would not encourage cartels as it leads to increase in inflation and would take strict action against cartels. The advantage of cartels to manufacturers is that they can earn supernormal profits. Firms can maximize their profits by reducing the quantity supplied and would lead to an increase in prices.

  2. LDC Essay Economics Aid

    the UNDP's poverty line of $1 per day, whereas in Indonesia, a more respectable 7% live below that line." 4 Country GNI per capita US $ 2002 Survey Year Gini Index5 Ration, Richest 10%: Poorest 10% Indonesia 710 1996 36.5 7.8 Zimbabwe 706 1990-91 56.8 22.0 Source: WDR It is

  1. case study economics

    As NHS is a government funded subject, it is actually just a free service at the point of delivery. The taxpayers pay for this good; therefore it does have a market value indirectly through taxes. And it is not a resource that is available all the time, thus making it limited and not scarce.

  2. economics commentary

    Even, world's production of pulses has not been showing any sign of improvement. It also recommended a short-term measure to cover up the demand-supply mismatch by importing a good deal of pulses from Pakistan where the production is substantial with lesser domestic demand.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work