OECD country – Republic of Korea
29 Mar 2010 Leave a Comment
in Economics, Section 3, Vietnam/Korea
1. Real GDP for the last decade
Real GDP for the last decade in Republic of Korea (S. Korea) has increased in general. However, S. Korea experienced declines in real GDP in 2001 and 2008. The real GDP reached over $1000 billion once in 2007, but it soon decreased to about $900 billion in 2008.
2. Real GDP per capita for the last decade
Real GDP per capita for the last decade in S. Korea has increased gradually. However, there was a slight decline from 2008 to 2009. The highest real GDP per capita over the decade is $19,716 (2008) and the lowest is $14,468 (2000).
3. Real GDP growth for the last decade
Real GDP growth for the last decade in S. Korea has been unstable each year. In the beginning of the decade, the growth rate was high (7.67%). Then the growth slowed down to 2.62% in 2003. Although it gets back up to around 4.00% from 2004 for 4 years, it drops to 1.93% again in 2008. In 2009, S. Korea experiences negative growth (-3.06%). That is, there were more harms than benefits that year in S. Korea.
4. Conclusion.
I think that S. Korea is slowly developing and growing to be a MEDC. However, S. Korea has been experiencing severe economic recession along with all the other countries recently. Therefore, they marked negative growth and a decrease in the real GDP measurements. However, seeing the trends throughout the last decade, I think that S. Korea will be able to make its economy stable and powerful in a few decades or even years.
the Olympics and the Economy
26 Feb 2010 Leave a Comment
The Olympic Games are a major international event featuring summer and winter sports, and the Olympic Winter Games 2010 are held in Vancouver, British Columbia, Canada. Over 2,000 athletes, each representing his or her country, participate in a variety of games. As a result, the fastest or the best performing athlete gets the gold medal, followed by silver and bronze. Getting many gold medals can boost up a country’s economy. For example, the gold medalists become models for a product, and theoretically, the demand of the product increases.
This “gold medal” effect, which is a positive externality, is seen in many countries, yet I think South Korea benefits a lot from it. As Korean, I know many facts about S. Korea’s history in the Olympics. Hence, I know that S. Korea has not been a strong country in the Olympics, especially the Winter Games. However, this year, S. Korea became the highest ranking country among other Asian countries. S. Korea achieved 6 gold, 6 silver and 2 bronze medals, getting 3 more silver medals compared to last Winter Games.
Although there are many great athletes, who have done their best and brought medals to S. Korea, Yu-na Kim set up a new history of figure skating. She got the gold medal by breaking the world record. In S. Korea, many companies are very happy and satisfied because Kim Yu-na’s gold medal will boost up S. Korea’s economy. For example, one financial company spent about 4 billion KRW (4 million USD) supporting Kim Yu-na and paying higher interest to customers of a “Kim Yu-na Banking” program. The executives of the company, however, mentioned that they do not regret about paying a high cost, since the economists of the company are predicting that the “gold medal” effect will maximize the company’s profit with at least about 5.5 billion KRW. That is, more people will apply for the special banking program, which will eventually increase the company’s profit. On the other hand, Samsung is also one of the companies that will benefit from her gold medal because she is a model for Samsung’s new Smart Phones. However, the economists are unsure if the “gold medal” effect will win over the “iPhone” boom in S. Korea.
In S. Korea, Kim Yu-na is treated as a “Queen”. Many of the Korean newspapers state that not only her elegant and beautiful performance, but also winning against Japan (I’m not trying to discriminate or belittle Japan) made Koreans to feel more proud of her. Winning gold medal in such a big competition must have been very stressful for her, but she should be proud of herself for bringing honor to S. Korea.
Externalities in Korea
24 Feb 2010 Leave a Comment
in Economics, Section 2, Vietnam/Korea
Externalities, which is are costs (negative) or benefits (positive) that are not reflected in free market prices. They occur all the time, and as Korean, I tend to observe many externalities in Korea. However, I want to talk about a big issue in Korean society at the moment.
One of the negative externalities these days is an after-graduation ceremony. Due to a graduation ceremony, the third-party, which is usually the community around the schools, gets affected. Just a graduation ceremony also affects the community with traffic jam. Parents of the students go to schools by cars, so it affects not only other parents, but also people who are on their way to work. On the other hand, in Korea, High School graduation ceremony is known to be troublesome because students throw flour at each other and burn their school related items. However, it is worse these days. It was reported that some students were stripped or caused pain by a number of delinquent students after the ceremony. Hence, it affected the community or town with a loud noise and accidents. Although the demand for the flour may have increased, there are more costs to the third-party.
IDOLS!
23 Feb 2010 Leave a Comment
in Economics, Section 2, Vietnam/Korea
IDOLS! Idol means a representation or symbol of an object of worship. In many Asian countries, young female students are “crazy” about the idols, which is usually defined as young singer groups in these cases. Fans love them and singers become popular as they gain more fans. However, fans are now causing many social issues.
First of all, young female students, the third party, are influenced by young celebrities, and they tend to stop studying. In Korea and Japan, many young girls stay in front of the singers’ company for almost whole day to see the singers face at least once. Since they stay there all the time, they get bad grades. Consequently, number of students have to repeat the senior year of the high school due to bad grades or no acceptance to the colleges. Many parents are aware of this situation and they usually try to stop their children, yet it’s hard to control children at puberty. Hence, some parents take a harsh decision and ground their children.
Secondly, many people spend money on their favorite singers, “idols”. They spend a lot of money, even though they are aware of that they are not going to get anything back in return. This affects the economy. It has both good and bad effects. It can be good to the market, especially fashion market, because the items that celebrities wear or use tend to be popular among people. Hence, the demand increases as more people want the item. On the contrary, it is bad for most individuals because they are usually students. That is, their parents have to pay for the cost, when the young girls don’t earn any.
In my opinion, fans should just stay as a fan. Although I have favorite singers, I don’t stay in front of the company building and wait for the idols to recognize me. I think that listening to their music and enjoying the TV programs they appear are enough for students like me. Buying a gift for them doesn’t guarantee you to meet the singers. Hence, it’s better to go do something productive, like studying, than to stay in front of the building.
ETS – the Best Business
18 Feb 2010 Leave a Comment
in Economics, IB Economics HL, Vietnam/Korea
ETS, the Educational Testing Service, is a nonprofit institution advancing quality education with valid educational testing, curriculum development assets and test prep products. Is it really TRUE? Is it really a “nonprofit” institution?
If you are an international student, you will agree with me. When you apply to the universities in the United States of America and you are not American citizen, you are required to take TOEFL (Test of English as a Foreign Language) and get at least 100 out of 120. It may be easy to get over 100 for people who studied English for a long time, but it may be hard for some people. However, if you have taken it before, you will know how much it costs. It costs around 150 USD, and it has been increasing for last 3 years or so. 150 USD is quite a lot of money as it is just testing for English. I personally don’t understand why it is more expensive than SATs. However, back to the purpose of ETS, I can’t believe how a “nonprofit” institution can be so profitable. TOEFL tests take place about twice a month all over the world, especially in Asian countries. In Korea, TOEFL is also needed for Korean universities if you are applying as an international student, and you need to get over 110. 110 can be hard even for people who have adequate English skills. Now, if you don’t know a lot about TOEFL, you might think that 150 USD is not a lot of money when you prepare to go to high ranking universities. However, people usually take more than once in order to get good scores. Just last week, I was talking to my Korean friend, who is applying to Korean university as an international student (she studied abroad for her whole life, so she can’t apply like other Korean students in Korea) about TOEFL, and she told me that she took four times in order to get 118. I was surprised at not only her high score, but also the amount of money she spent on one test. She spent about 600 USD to get a good score and to get into a good university.
I think testing service is a great business as the company can insist that it’s a nonprofit institution and earn a lot of money. I also took TOEFL once and thought that it’s extremely expensive compared to SATs. I personally think that ETS is very smart and effective in their business plan as they are currently and will earn a lot of money from international students. CHA-CHING!
Coffee? Coffee!
11 Nov 2009 Leave a Comment
*Robusta coffee is considered to be a lower quality coffee compared to Arabica coffee. Robusta coffee beans tend to produce a more bitter brew, with a musty flavor and less body.
Although the price of coffee varies in a wide range, Robusta coffee is considered as an inferior good. According to the article, Robusta coffee will provide a buffer by harvesting more crops in Vietnam, the world’s biggest grower of Robusta coffee, since Robusta coffee was informed that there will be a tropical storm in New Orleans the home of fifth of Arabica coffee bean stockpiles. Since Arabica coffee is affected by weather, it was predicted that sales of Robusta coffee would increase. 
However, according to the general law of supply, suppliers are supposed to produce more when the price gets higher. However, in this case, Robusta coffee is still produced and supplied a lot, even though the price dropped. Hence, as the diagram shows, the market equilibrium decreased in price, yet increased in quantity. Therefore, the consumers benefit more from this change of market equilibrium.
EXPENSIVE Imported Cars
14 Oct 2009 4 Comments
in Economics, IB Economics HL, Vietnam/Korea
On october 10, according to the article from Le Viet Nam, Vietnamese government decided to raise the minimum price for more than 600 imported car models by setting high taxes on them. It’s related to what we are learning now in section 2 as it discusses about the minimum price. In my opinion, this government’s price control may help the Vietnamese car manufacturers, since the cars, which are from the Vietnamese comapnies, are cheaper than the foreign cars. The consumer’s expectation for the price might influence the demand of the car, but unless the consumer’s taste or preference change, the demand will not be greatly affected. Therefore, I think it will be the consumers, who are going to get hurt, by having to pay more than before for their prefered car model.
HDI (Human Development Index)
07 Sep 2009 Leave a Comment
HDI refers to Human Development Index. It ranks countries by rates, including life expectancy, literacy rate, and GDP, in order to show the human development of the countries. It also shows if a country is developed or developing. The index shows a long and healthy life, knowledge, and a decent standard of living.
The HDI rank of Vietnam is 105 and the value is 0.733. Although Vietnam has low HDI value, it’s doing better than Algeria that has close HDI value. This can be inferred from the comparison between HDI and GDP. By the comparison, you can learn about if country is doing compare to other countries.
However, I think HDI is not accurate since it only measures life expectancy, GDP, and literacy rate. There are many other aspects that are important for human development. That is, aspects, such as environment, telecommunication, and political issue, relate to the human development, but they are not included for calculating HDI. Hence, HDI shows a limited perspective.
Economics development shows if the there is an improvement in the standards of living due to the production. When there is an economic growth, it means that the economy’s production increased and the standard of living also increased as a result. However, sustainable development doesn’t refer to increase in any aspects. To sustain economic activities, it msut have a neutral effect on resources.
