• 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

    example providing new and better technology, the most secure way, is to use the Keynesian approach. As a final remark, this article does a good job in portraying the various dilemmas policy makers have to deal with in the economy.

  1. Growth and Development Problem Set - IB Economics exam questions and answers.

    For example, GDP per capita is an indicator of the level of output or income per person. The number of years of life expectancy is an indicator of the state of the health of a population. The degree of literacy is an indicator of the level of education in the country.

  2. 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

  1. IB Economics H.L. Coursework

    in supply, shown by an arrow in the appropriate demand and supply diagram, Figure 2. below. The subsidy causes a larger quantity (q1 instead of q0) to be supplied, however the difference between the price that suppliers need to receive to produce at that quantity (q1)

  2. Economics Commentary

    Internationally, Scotland is seen as a public health leader. "You had the courage to introduce smoke free pubs; let us hope that you have the same courage to introduce a minimum price for alcohol." But Jeremy Beadles, chief executive of the Wine and Spirits Trade Association, said minimum pricing was not a panacea for solving "deep-seated cultural problems".

  1. Economics Commentary

    Among subjects mooted for the summit, provisionally planned for June 17, are the fight against terrorism -- including in neighboring Afghanistan -- as well as cooperation in the field of the rule of law and trade issues, according to a Czech EU presidency source.

  2. 15 Historical Economic Questions on Mercatilism and the Development of European Countries.

    Much of their focuses aim to find the potential for life on another planet. When water is seen as the primary indicator that life on another planet could exist, it?s obviously important for ours. The importance of water is simply a derivative of the greater importance of geography.

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