Macroeconomics 2 Essay Example | Topics and Well Written Essays - 1000 words

Macroeconomics 2 - Essay Example Japan is considered the strongest economy in the Asian region. The Asian economies are dependent on Japanese trade and imports. The earthquake that hit Japan has completely disrupted the entire economy of the island of Japan. The financial markets of Japan have been negatively impacted by the event. The Toyko shares drop by 11% on March 15, 2011 and by 6.2% on Monday March 14, 2011. The total combined drop in value was 17.2%. Along with the news and effects of the earthquake there is currently a lot of speculation due to the nuclear scare the people of Japan are facing. There is a possibility that the damage in the nuclear plants released radiation into the atmosphere which would cause environmental damage to the ecology and to humans. Millions of Japanese inhabitants are at risk of exposure to radiation if the worse scenario becomes a reality. The uncertainty associated with the nuclear condition of Japan is causing panic among the investor community and within the population of Jap an. A major problem that the region of Japan is facing since the earthquake hit them is that its supply chain logistics have been altered. The supplier logistics have been dislocated throughout Japan due to restrictions on using highways for freight has been imposed. When companies are unable to receive raw inventory on time it can cause a firm to suffer from a shutdown. Hundreds of corporations in Japan have close down since the earthquake hit. Along with logistics another problem companies are facing is a lack of stability in its power grid. Electricity shutdowns have been occurring throughout the entire region of Japan. Without electricity companies are unable to produce. Another industry that has been hit hard by the event is the tourism industry. People are scare to travel to Japan right now. Many flights in and out of Japan have been cancelled. Tourism brings in a lot of money because the people that come to Japan spend money during their visit to the nation. There are many so cial aspects that must be considered after the earthquake. The government of Japan has to invest resources in order to find shelter for the thousands of victims that lost their homes. The fact that food and oil prices are high hurts in the recovery process. Higher prices on food will hurt the ability of the government and the non-profit organizations to purchase sufficient food to feed the victims. The medical industry had a huge increase in the demand for its services after the earthquake. Thousands of people were injured as a result of the earthquake. Japan needs the immediate importation of medical professionals in order to meet the demands for medical services as a result of the crisis. The rise in oil prices is another factor that is negatively impacting the Asian economies. A rise in the price of crude oil has inflationary consequences due to the fact that oil has so many derivative products and because virtually all transportation vehicles use gasoline to operate. In the next few months Japan is going to experience a major boom in its construction industry. There is going to be a