Japan’s Gross Domestic Product: Term Definition
Gross Domestic Product is a measure of output that includes personal consumption, government purchases, private inventories, and foreign trade balance. Real GDP as distinguished from nominal GDP takes price change into account and holds prices constant such that it only measures the changes in production. A positive GDP indicates economic growth, while a negative GDP indicates an economic decline or recession.
A comparison of the four countries during the four quarters of 2008 shows all countries went into recession with negative average GDPs. The USA recorded the worst performance in the 4th quarter at -6.8% in comparison to Canada’s -0.79% the best performer in that quarter. All four countries went into recession through the quarters with their economic situation worsening with every next quarter.
USA’s recession could be blamed on unemployment and production figures and the third-quarter decline in GDP, which lead to a reduction in record trade deficits and high personal savings rates (Domestic-finance, n.d.).
The 2009 period, however, saw economic growth by the USA in the 4th quarter, as compared to 2008 when it had a positive GDP of 5% a leap from 1.6% in the 3rd quarter. This was in comparison to 0.7% for the UK, 1.5% for Japan, and 1.21% for Canada in the same period. The four economies steadily realized economic growth over the recent year.
The US recorded a decline in 2010 from 3.7% in the 1st quarter to 3.1% in the 4th quarter. This was a decline from the previous year’s same period. However, it had the highest GDP in any given quarter as compared to the UK, Canada, and Japan.
In the recent period of 2011, the US economy grew 2.5% in the 3rd quarter up from an increase of 1.3% in the 2nd quarter. The 3rd quarter results registered a decline compared to the same period in the previous quarter with an increase of 2.6%. The UK recorded an increase of 0.5% in the 3rd quarter as compared to the previous year with 0.6%. Canada, on the other hand, saw a decline in economic growth with an increase of 0.9% as compared to the same period in the previous year with 1.4%. Japan’s economy went into recession in that period with a consecutive negative real GDP in the 1st and 2nd quarters as a result of natural disasters.
Japan had a GDP growth of -2.9% in 2010 but, its total GDP growth was 4.0% one of the highest growth rates for about 20 years. However, its economy would be disrupted in March 2011 due to the earthquake and the effect of the tsunami thus Japan re-entered recession.
Overall, the US recorded a steady increase in its GDP in 2011, followed by the UK which also had steady but slow growth in the same period. Canada comes in 3rd with a decline in the 2nd quarter following an increase in the previous quarter. Japan finished last with its economy going into recession.