Questions

1. Does a slow economic growth mean the economy is mature?

è According to global economic growth experience in last 100 years, it is true.

Is it affected by the way other similar economies behave?

è I would say when an economy is big enough it does not grow fast like an adult does not run fast compared to kids.

Is the state of 1st world country economies like Korea the destination of all growing economies?

è I don’t understand your Q exactly. China and India are both huge economies but they are growing fast because at the individual income level they are not matured.

2. For unemployment insurance projects done in European countries, what is the reasoning behind it?

è They want to support the unemployed and other disadvantages compared to other countries. This philosophy is much related to their social tradition.

Doesn't it make people lazy as other forms of socialist practices?

è That is true.

What does it achieve in a capitalist country like Korea?

è Korea does not have an unemployment insurance system as good as European countries because they are worring about workers’ laziness.

3. How can deflation (as in the case of Japan )work and sustain itself?

è As we talked about in class, deflation decreases people’s consumption which is not good for recovering economy. If recession goes on the deflation continues.

Since everything in the country goes down, who bears the final blow from the change in pricing since they still trade with the outside world? Is the blow taken by the government?

è No, the decreased price burden goes to the manufacturing companies. If there are many corporations like this, government’s tax revenue decreases.