Place of Japan in the World Economy

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It is inseparable from the geography and ecology of Earth, and is therefore something of a misnomer, since, while definitions and representations of the "world economy" vary widely, they must at a minimum exclude any consideration of resources or value based outside of the Earth. For example, while attempts could be made to calculate the value of currently unexploited mining opportunities in unclaimed territory in Antarctica, the same opportunities on Mars would not be considered a part of the world economy—even if currently exploited in some way—and could be considered of latent value only in the same way as uncreated intellectual property, such as a previously unconceived invention. Beyond the minimum standard of concerning value in production, use, and exchange on the planet Earth, definitions, representations, models, and valuations of the world economy vary widely.

It is common to limit questions of the world economy exclusively to human economic activity, and the world economy is typically judged in monetary terms, even in cases in which there is no efficient market to help valuate certain goods or services, or in cases in which a lack of independent research or government cooperation makes establishing figures difficult. Typical examples are illegal drugs and other black market goods, which by any standard are a part of the world economy, but for which there is by definition no legal market of any kind.

However, even in cases in which there is a clear and efficient market to establish a monetary value, economists do not typically use the current or official exchange rate to translate the monetary units of this market into a single unit for the world economy, since exchange rates typically do not closely reflect worldwide value, for example in cases where the volume or price of transactions is closely regulated by the government.

Rather, market valuations in a local currency are typically translated to a single monetary unit using the idea of purchasing power. This is the method used below, which is used for estimating worldwide economic activity in terms of real US dollars or euro. However, the world economy can be evaluated and expressed in many more ways. It is unclear, for example, how many of the world's 7.01 billion people have most of their economic activity reflected in these valuations.

In 2013, the largest economies in the world with more than $2 trillion, €1.25 trillion by nominal GDP were the United States, China, Japan, Germany, France, the United Kingdom, Brazil, Russia, and Italy.

The following is a list of the twenty largest economies by nominal GDP at a specific year according to International Monetary Fund

Table 1

Twenty Largest Economies in the World by Nominal GDP

1

[pic 3] United States

11

[pic 4] Canada

2

[pic 5] China

12

[pic 6] Australia

3

[pic 7] Japan

13

[pic 8] Spain

4

[pic 9] Germany

14

[pic 10] South Korea

5

[pic 11] France

15

[pic 12] Mexico

6

[pic 13] United Kingdom

16

[pic 14] Indonesia

7

[pic 15] Brazil

17

[pic 16] Netherlands

8

[pic 17] Italy

18

[pic 18] Turkey

9

[pic 19] India

19

[pic 20] Saudi Arabia

10

[pic 21] Russia

20

[pic 22] Switzerland

1.2. Japan as the subject of the global economy

Japan has long been regarded as one of the most technologically advanced economies in the world with its major contributions in the industrial and electronic sectors. Japan also benefits from robust business in automotive, semiconductors, and processed foods, among other industries. While Japan's agricultural industry is fairly small, it is the most profitable in the world. The figure 1.1 shows rate of the 10 economically developed countries of the world Where GDP indicator of Japan is 4.8 trillions $ and takes the third place after China with 10 trillions $ and USA with 17.5 trillions $ in 2014.

[pic 23]Fig. 1.1 World's largest economies in 2014 year

Source:

Japan’s economic freedom score is 72.4, making its economy the 25th freest in the 2014 Index. Its score is 0.6 point higher than last year; reflecting improvements in trade freedom, investment freedom, and control of government spending that outweigh deteriorations in freedom from corruption, monetary freedom, and business freedom. Japan is ranked 6th out of 41 countries in the Asia–Pacific region. Country Comparisons

Over the 20-year history of the Index, Japan’s economic freedom has regressed, with its score falling by nearly 3 points. Declines have been recorded in six of the 10 economic freedoms, with double-digit declines in financial freedom, property rights, freedom from corruption, and control of government spending.

As you can see on the figure 1.2 Japan’s overall economic freedom score decline over the past two decades and became the third worst among advanced economies.

[pic