Article: Revised GDP figures show Czech economy in better light
"The upward revision places Czech public finances in a better light and gives the cash-strapped government leeway in fulfilling its target of reducing the fiscal deficit below four percent of GDP by 2006."
The Statistics Office of Czech Republic removed the original GDP figures for the years 2000-2002 and replaced them with a modified, "revised" version of the figures. This modification to the GDP was meant to act almost as a cover-up for the more accurate amounts that showed the Czech Republic’s poor financial position. The revised version of the GDP for the years 2000-2002 were 6%, 7%, and 8% higher than the original amount respectively. Although these adjustments did not affect the year to year GDP growth rates, they altered some very important values such as national debt and deficit that were taken into calculation as the basis of the GDP. This was done to buy time for reaching their financial goal for the year 2006, but the increase in GDP could raise some new problems. “The higher GDP, however, also implies that the Czech Republic will have to contribute more to European Union funds.” Increased contributions to the European Union funds could result in a slower rate of recovery from the deficit.
Relation to Chapter 6
In the chapter, it is mentioned that the measure of GDP isn’t completely accurate especially when it comes to measuring social welfare and even economical well being. When numbers and values of GDP can be revised to “show the economy in a better light”, it lessens the accountability of the numbers. In the article, for example, the values in Czech Republic’s GDP are overstated intentionally on top of all the other inaccuracies that the GDP figure might have. Even though the country is in great debt, GDP can be altered to give off a false impression. This means that GDP figures can often be misleading, shouldn’t be used as the only basis to measuring the well being of a country. Real GDP is a more dependable figure than GDP, but can also be revised to better portray a country’s financial position. It is disappointing to see that even an important statistic like the Gross Domestic Product can be hard to trust. One needs to take into account all the factors that go into a statistic to accurately utilize the figure.
Note*** commented on Colin Ng Ch. 5 & 6 blog
Wednesday, June 13, 2007
Sunday, April 08, 2007
Chapter 5 Article
Article: Working more to earn less; doctors say they're losing out
“If a doctor was paid $100 for a procedure in 1982, he would receive nearly $135 for that service now. But inflation has risen by 65 per cent over the same period, meaning that in fact that $135 is really worth only $81 and change, or a decline of 18.66 per cent.”
Doctors in Vancouver are highly unsatisfied with their wages. Most of them have to work extra hours and see extra patients just to make a comparable income due to inflation. "In the old days 20 years ago if I did a hysterectomy, it would buy a nice suit. Ten years ago, it would get me a decent sports jacket. Now it would just get me a classy pair of trousers." says obstetrician-gynaecologist Dr. John Turner who specializes in pregnancies. Although within Canada, doctors in B.C. are at the top of the scale in terms of wages compared to other provinces, its standard of living is also higher, and the aged population also puts more pressure on the medical system and its physicians. Doctors and physicians feel like they’re losing valuable leisure time all in the effort to catch up in their income. Many feel like they’re still falling behind after putting in the extra hours. "I am not one of those chosen doctors on the golf course on a Wednesday afternoon because I can't afford to. The only way you can survive now is to work longer hours and see more patients. You just feel like you’re on the treadmill all the time.” says Dr. Jack Burak, a family physician with 23 years of service. Being a doctor today, is definitely not as comfortable as being a doctor in the 80’s.
Relation to Chapter 5
This article is an example of Cost-Push Inflation. Since the standard of living in B.C. has gone up, there is a higher demand for wages in order to keep up with inflation. In the textbook, it says “Cost-push inflation is usually preceded by demand-pull inflation.” This could very well reflect the demand for residence in the lower mainland and other parts of B.C. which is causing the demand-pull inflation. In response to the increase in prices, employees and other working individuals then feel a need for an increase in salary to keep up with the economy. This portrays the type of dissatisfaction which occurs when the rate in inflation increases faster than the increase in wages.
“If a doctor was paid $100 for a procedure in 1982, he would receive nearly $135 for that service now. But inflation has risen by 65 per cent over the same period, meaning that in fact that $135 is really worth only $81 and change, or a decline of 18.66 per cent.”
Doctors in Vancouver are highly unsatisfied with their wages. Most of them have to work extra hours and see extra patients just to make a comparable income due to inflation. "In the old days 20 years ago if I did a hysterectomy, it would buy a nice suit. Ten years ago, it would get me a decent sports jacket. Now it would just get me a classy pair of trousers." says obstetrician-gynaecologist Dr. John Turner who specializes in pregnancies. Although within Canada, doctors in B.C. are at the top of the scale in terms of wages compared to other provinces, its standard of living is also higher, and the aged population also puts more pressure on the medical system and its physicians. Doctors and physicians feel like they’re losing valuable leisure time all in the effort to catch up in their income. Many feel like they’re still falling behind after putting in the extra hours. "I am not one of those chosen doctors on the golf course on a Wednesday afternoon because I can't afford to. The only way you can survive now is to work longer hours and see more patients. You just feel like you’re on the treadmill all the time.” says Dr. Jack Burak, a family physician with 23 years of service. Being a doctor today, is definitely not as comfortable as being a doctor in the 80’s.
Relation to Chapter 5
This article is an example of Cost-Push Inflation. Since the standard of living in B.C. has gone up, there is a higher demand for wages in order to keep up with inflation. In the textbook, it says “Cost-push inflation is usually preceded by demand-pull inflation.” This could very well reflect the demand for residence in the lower mainland and other parts of B.C. which is causing the demand-pull inflation. In response to the increase in prices, employees and other working individuals then feel a need for an increase in salary to keep up with the economy. This portrays the type of dissatisfaction which occurs when the rate in inflation increases faster than the increase in wages.
Saturday, February 24, 2007
Chapter 4 Article
Article: Lawyers.comSM Survey Finds Wealthiest Canadians Most Likely to Purchase Products or Services for Cash Without Paying GST
“The underground economy is booming, thanks to the 40 per cent of Canadians who, at some point, according to a new survey by lawyers.comSM, have not paid tax on goods or services bought with cash.”
It is well known that people hate paying taxes, but when the numbers (percentage of Canadians who have avoided paying taxes on sales) are shown, the amount of money lost in the underground economy is evidently quite high. In fact, British Columbia (at forty five percent) has the highest percentage of people who have avoided paying sales taxes. Recently on a survey conducted by Lawyers.com (an online directory of lawyers and law firms in Canada), it is shown that wealthy Canadians are more likely to make purchases without paying taxes. The survey also showed that men take advantage of the underground economy more so than women. Despite the punishments involved with not paying taxes, two-fifths of the population has violated that crime without being detected. Some of these punishments, if the person is caught, can be as serious as serving two years in prison, and receiving a $10000 dollar fine. Even though these punishments exist, we rarely see them being put into effect.
Relation to Chapter 4
From the three different kinds of tax systems that exist, (progressive, proportional and regressive) as mentioned in the textbook, Canada uses the progressive tax system where a person basically pays the a percentage of their income according to how much he or she earns. With all that is happening in the article mentioned above, it sort of defeats the purpose of having a progressive tax system in the first place because the people who are supposed to be paying the most taxes (the rich people) are the ones who aren’t paying it. The textbook describes taxes as being “imposed in order to provide revenue for government, and also to influence economic conditions.” The problem is, most of this “revenue” for the government, is being provided by lower income individuals. “The main objective of any tax is that it be equitable or fair”, but that is a very hard concept to achieve considering the amount of tax revenue lost in the underground economy. Things like Hospitality, Bartering, and Contracting work, are all a part of the Underground Economy that digests a large portion of the tax money.
“The underground economy is booming, thanks to the 40 per cent of Canadians who, at some point, according to a new survey by lawyers.comSM, have not paid tax on goods or services bought with cash.”
It is well known that people hate paying taxes, but when the numbers (percentage of Canadians who have avoided paying taxes on sales) are shown, the amount of money lost in the underground economy is evidently quite high. In fact, British Columbia (at forty five percent) has the highest percentage of people who have avoided paying sales taxes. Recently on a survey conducted by Lawyers.com (an online directory of lawyers and law firms in Canada), it is shown that wealthy Canadians are more likely to make purchases without paying taxes. The survey also showed that men take advantage of the underground economy more so than women. Despite the punishments involved with not paying taxes, two-fifths of the population has violated that crime without being detected. Some of these punishments, if the person is caught, can be as serious as serving two years in prison, and receiving a $10000 dollar fine. Even though these punishments exist, we rarely see them being put into effect.
Relation to Chapter 4
From the three different kinds of tax systems that exist, (progressive, proportional and regressive) as mentioned in the textbook, Canada uses the progressive tax system where a person basically pays the a percentage of their income according to how much he or she earns. With all that is happening in the article mentioned above, it sort of defeats the purpose of having a progressive tax system in the first place because the people who are supposed to be paying the most taxes (the rich people) are the ones who aren’t paying it. The textbook describes taxes as being “imposed in order to provide revenue for government, and also to influence economic conditions.” The problem is, most of this “revenue” for the government, is being provided by lower income individuals. “The main objective of any tax is that it be equitable or fair”, but that is a very hard concept to achieve considering the amount of tax revenue lost in the underground economy. Things like Hospitality, Bartering, and Contracting work, are all a part of the Underground Economy that digests a large portion of the tax money.
Monday, January 22, 2007
Chapter 3 Article
Article: Canadian Government Encourages CRTC to Ease VoIP Regulation
“Canada’s federal government has made a move to ease telecom regulation, by asking the CRTC to reconsider a decision made last year to control the pricing of VoIP telephone services.”
In May 2005, new regulations were set on Canada’s largest telephone companies. They were no longer allowed to set their own prices when launching IP-based communication services, leaving room for new competitors to enter the market. Shaw was one of these companies. However, instead of aiding the market, the regulation enabled Shaw to take advantage of the situation, and charge higher-than-average prices for their services, which they did. Canada’s Industry Minister, Maxime Bernier, is now stating that “After careful study … and the subsequent appeals, the government believes it is in the public interest for the CRTC to reconsider its decision”. She also stated: “In order to encourage innovation and productivity, it is imperative that regulatory measures interfere as little as possible with competitive market forces”. Though there is good reason to re-evaluate the newly set regulations, many also think that it has something to do with our recently elected conservative government, in attempt to create a better free market competitive environment in the industry.
Relation to Chapter 3
This article shows the importance of government regulation in a country’s market. In the article, the government made the wrong decision to regulate the prices on Canada’s largest telephone companies in effort to promote competition. This caused other companies to take advantage, and raise their prices. The regulation backfired, showing a flaw in the public system. In the textbook, the lack of competition is described as a market imperfection, but in the case of this situation, it is more efficient to have a single supplier rather than competition. On pg. 87 of the textbook, it states: “Despite the advantages of competition, it may be more efficient in some industries to have a single supplier of the product or service.” The example given was that of competing telephone companies in the same town. The situation in the article illustrates what could happen if the industry was wrongly regulated. It is arguable that telecommunications is part of a natural monopoly, and that it is better to have one company controlling the whole market, rather than several competing companies. Something else it shows, is that the party elected into the government, has significant effects on the market. Since the conservatives were voted into power, they are making changes to establish a more fair state of competition in the industry.
“Canada’s federal government has made a move to ease telecom regulation, by asking the CRTC to reconsider a decision made last year to control the pricing of VoIP telephone services.”
In May 2005, new regulations were set on Canada’s largest telephone companies. They were no longer allowed to set their own prices when launching IP-based communication services, leaving room for new competitors to enter the market. Shaw was one of these companies. However, instead of aiding the market, the regulation enabled Shaw to take advantage of the situation, and charge higher-than-average prices for their services, which they did. Canada’s Industry Minister, Maxime Bernier, is now stating that “After careful study … and the subsequent appeals, the government believes it is in the public interest for the CRTC to reconsider its decision”. She also stated: “In order to encourage innovation and productivity, it is imperative that regulatory measures interfere as little as possible with competitive market forces”. Though there is good reason to re-evaluate the newly set regulations, many also think that it has something to do with our recently elected conservative government, in attempt to create a better free market competitive environment in the industry.
Relation to Chapter 3
This article shows the importance of government regulation in a country’s market. In the article, the government made the wrong decision to regulate the prices on Canada’s largest telephone companies in effort to promote competition. This caused other companies to take advantage, and raise their prices. The regulation backfired, showing a flaw in the public system. In the textbook, the lack of competition is described as a market imperfection, but in the case of this situation, it is more efficient to have a single supplier rather than competition. On pg. 87 of the textbook, it states: “Despite the advantages of competition, it may be more efficient in some industries to have a single supplier of the product or service.” The example given was that of competing telephone companies in the same town. The situation in the article illustrates what could happen if the industry was wrongly regulated. It is arguable that telecommunications is part of a natural monopoly, and that it is better to have one company controlling the whole market, rather than several competing companies. Something else it shows, is that the party elected into the government, has significant effects on the market. Since the conservatives were voted into power, they are making changes to establish a more fair state of competition in the industry.
Friday, November 10, 2006
Chapter 2 Article
Article: Basic Chic From Japan. But Will It Sell?
"Uniqlo will be the largest single-brand fashion store in the retail-saturated Manhattan neighborhood, putting its competitors on notice that the company has aggressive plans for the United States."
A new line of clothing from Japan called Uniqlo has moved its way into America with 720 new stores. It’s approach in the market is to keep the products inexpensive and in large amounts. The owner of Uniqlo quoted: “If I opened a very small store, no one would ever pay attention…We want to sell basics to everyone, so to make people notice us we have to open in a big way, to make people recognize who we are.” Since its advertising started in the US, Uniqlo has been known to many as ‘The Gap of Japan”. Although this is a different approach to most other retail stops in selling clothes, there have already been clothing shops selling their stock at thrifty prices such as Zara, H&M, and Old Navy. This breakthrough into the American Market could be a risky one. The owner who started the Uniqlo chain in Hiroshima, Tadashi Yanai, predicts that sales in the United States would reach $30,000,000. That sum of money might be difficult to achieve considering the powerful advertisements from competing retailers, especially Wal-Mart.
Relation to Chapter 2: Demand
Several things mentioned in Chapter 2 in the text book maybe determine how well this Japanese clothing company does in America. The Demands factors we learned were: Price, Change in the price of substitute products, Change in the price of complementary products, Incomes, Tastes and Preferences, Expectations of Future prices, Number and Characteristics of buyers, and Expectations of future incomes. I think the two factors that would effect Uniqlo the most are price, change in the price of substitute products, and tastes and preferences since we’re talking about a clothing store. The clothes from Uniqlo might be inexpensive compared to other clothing retail shops, but people’s tastes and preferences could still drive them to buy something more expensive. Since the U.S. is a very developed country, people have the money to pay for more expensive clothing as long as they like the style. Because of these factors of demand, Uniqlo may or may not succeed in America. There are too many factors involved to make an accurate enough prediction, and that’s an aspect of economics…there is no sure way to predict what might happen over time.
"Uniqlo will be the largest single-brand fashion store in the retail-saturated Manhattan neighborhood, putting its competitors on notice that the company has aggressive plans for the United States."
A new line of clothing from Japan called Uniqlo has moved its way into America with 720 new stores. It’s approach in the market is to keep the products inexpensive and in large amounts. The owner of Uniqlo quoted: “If I opened a very small store, no one would ever pay attention…We want to sell basics to everyone, so to make people notice us we have to open in a big way, to make people recognize who we are.” Since its advertising started in the US, Uniqlo has been known to many as ‘The Gap of Japan”. Although this is a different approach to most other retail stops in selling clothes, there have already been clothing shops selling their stock at thrifty prices such as Zara, H&M, and Old Navy. This breakthrough into the American Market could be a risky one. The owner who started the Uniqlo chain in Hiroshima, Tadashi Yanai, predicts that sales in the United States would reach $30,000,000. That sum of money might be difficult to achieve considering the powerful advertisements from competing retailers, especially Wal-Mart.
Relation to Chapter 2: Demand
Several things mentioned in Chapter 2 in the text book maybe determine how well this Japanese clothing company does in America. The Demands factors we learned were: Price, Change in the price of substitute products, Change in the price of complementary products, Incomes, Tastes and Preferences, Expectations of Future prices, Number and Characteristics of buyers, and Expectations of future incomes. I think the two factors that would effect Uniqlo the most are price, change in the price of substitute products, and tastes and preferences since we’re talking about a clothing store. The clothes from Uniqlo might be inexpensive compared to other clothing retail shops, but people’s tastes and preferences could still drive them to buy something more expensive. Since the U.S. is a very developed country, people have the money to pay for more expensive clothing as long as they like the style. Because of these factors of demand, Uniqlo may or may not succeed in America. There are too many factors involved to make an accurate enough prediction, and that’s an aspect of economics…there is no sure way to predict what might happen over time.
Thursday, November 09, 2006
Chapter 1 Article
Article: 'Water Stress' brings great returns for investors
"When water flows from your kitchen tap, what do you see? It should be dollar signs."
In this article, water is described as one of the biggest money makers in Canada...maybe even more so than oil. In most countries, Canada included, there is a shortage of water despite the fact that it takes up two-thirds of the planet. Because of this, the price of ‘drinkable’ water is slowly increasing. Apparently, the problem lies in the lack of sufficient drinkable water along with skyrocketing population growth around the world, as shown by a recent UBS Investment Research report by analyst Shirley Knott. This problem is not only effecting developing countries, but it is a on going concern in developed countries as well. If this trend continues, and it most likely will, the scarcity and necessity for water may drive its price up into the clouds like it did to oil.
Relation to Chapter 1
In the textbook, it was stated that everything is scarce, no matter how large of a quantity exists. This article is a perfect example of why that statement is true. It shows that even when you have something as plentiful as water, there are still situations in where there could be a shortage. In fact, there is a section in the textbook where the problem of water shortage is addressed: “On average, each Canadian uses 7100 litres of water a day-taking into account household, industrial and agricultural use.” Even though we have 14 percent of the world’s lakes and 9 percent of the world’s river flow in Canada, it doesn’t make up for the fact that we are the world’s second highest water users. I think the concept of scarcity is the idea that there is a limited amount to everything, which will hopefully remind econimists of using resources in a sustainable way.
"When water flows from your kitchen tap, what do you see? It should be dollar signs."
In this article, water is described as one of the biggest money makers in Canada...maybe even more so than oil. In most countries, Canada included, there is a shortage of water despite the fact that it takes up two-thirds of the planet. Because of this, the price of ‘drinkable’ water is slowly increasing. Apparently, the problem lies in the lack of sufficient drinkable water along with skyrocketing population growth around the world, as shown by a recent UBS Investment Research report by analyst Shirley Knott. This problem is not only effecting developing countries, but it is a on going concern in developed countries as well. If this trend continues, and it most likely will, the scarcity and necessity for water may drive its price up into the clouds like it did to oil.
Relation to Chapter 1
In the textbook, it was stated that everything is scarce, no matter how large of a quantity exists. This article is a perfect example of why that statement is true. It shows that even when you have something as plentiful as water, there are still situations in where there could be a shortage. In fact, there is a section in the textbook where the problem of water shortage is addressed: “On average, each Canadian uses 7100 litres of water a day-taking into account household, industrial and agricultural use.” Even though we have 14 percent of the world’s lakes and 9 percent of the world’s river flow in Canada, it doesn’t make up for the fact that we are the world’s second highest water users. I think the concept of scarcity is the idea that there is a limited amount to everything, which will hopefully remind econimists of using resources in a sustainable way.
Tuesday, November 07, 2006
Subscribe to:
Posts (Atom)