Japan's economy

Essay by tjantik June 2006

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What is Fiscal Policy?

Fiscal Policy is the economic term which describes the actions of a government in setting the level of public expenditure and how that expenditure is funded.

A function of fiscal policy, along with monetary policy, is to regulate the level of economic activity, the price level, and the balance of payments. Fiscal policy also determines the distribution of resources between the public sector and the private sector and influences the distribution of wealth.

Japan's economy overview in 2005

In 2005, Japan's economy kept improving although there was a constant deflation, which was not a typical way of economic recovery.

But, there are a couple of indicators in Japan's economy, which I believe that they are a good sign of economy.

What I found are as follows:

1. The more investment in private sectors, particularly in manufacturing business.

2. There is more employment offers for newly graduate

3. More budget for educational project to NEET (young people Not in Education, Employment or Training). This is a public sector project.

The more investment in private sectors, particularly in manufacturing business

Orange: Production

Green: Inventory in Stock

Light blue shadow: Ressesion

Chart from Nikkei Net for Manufacturer business as of February 2006

The above was the chart of manufacturers' business flow. Their business has been improving since 2003. Last December, there was 1.4% increase in production comparing to the previous month and the production has been increasing five months in a row.

Manufacturers, which make the devices for a flat panel display and LCDs, or the parts for cellular phones, have a great deal of contribution to Japan's economy.

ULVAC, which is one of leading manufacturer in this industry, makes low-temperature Poly-STIFT LCDs, OLED, copper wire-Low k materials for semiconductors, FRAM/MRAM, chemical compound semiconductors, carbon nanotubes,