Week 10 - Friday (Reflection)

a. What did you learn in this class that you believe will be most directly applicable to understanding how the world works?

The most directly applicable concept that we had gone over in class would be supply-and-demand curves. People are rational. Let a person who would buy a can of Mountain Dew for $1 be given. That person would buy ten Mountain Dew if the price of the soda was $1, but if the price was to increase to $5, the person would only buy two instead of ten. Perhaps this process was too obvious. However, the supply-and-demand curve successfully illustrates this abstract concept into a very concrete graph for everyone to understand; the same thinking can be applied to other products and the people in similar situations. Now, the students can see why people would buy less if the price was to increase and buy more if the price was to decrease.

b. What topics are you interested in learning more about, after this class ends?

An interesting discussion topic/ topic that I would like to learn after this class would be what is true price of our liberal arts education. Many students at Kalamazoo College pay a lot of money to go here. It would be not only educational but motivational if we learn and explain to ourselves what the economical cost of this education. Some may think that it is an investment while some may think that this is a too costly. I would be interested in what others have to share about the topic.

c. What advice would you give to a student considering taking this class?

Although many discussions are opinion based, they do require some basic knowledge of economics. I would strongly suggest that students who take this class to have taken Economics 101 at least. They would contribute a lot more in discussion and be more interested what is being talked about.

Week 10 - Wednesday (Final News Blog Assignment)

            On Tuesday, as the Japanese yen appreciated, South Korea's stock KOSPI (Korea Composite Price Index) gained 9.40 points or 0.47 percent, to 1,998.97 in the first 15 minutes of trading. Large-cap exporters were the biggest winners as most of the shares appreciated; Korea's largest corporations such as Samsung Electronics and Hyundai Motors also increased 0.2 and 0.7 percent respectively. Overnight, the yen appreciated to 99 yen against the United States dollar in the market, which broke a nearly one-month winning streak of the dollar since May 9th. The Korean won was being traded at 1,120.35 won against the dollar at the same time; this was an increase of 7.65 won from Monday.

            Recently, our class had gone over the foreign exchange rates among countries and the impact of them as it either appreciates or depreciates. In this news, when the Japanese yen appreciated against the Korean won, it became cheaper for the Japanese people to use yen to buy the Korean stocks. Because more people bought the stocks, the demand curve moved to the right, appreciating KOSPI. It was also told that the yen appreciated against the United States dollar. If I were in an economist, I could guess that the American stock prices might also increase as it happened with South Korean stocks. However, nothing is certain in the economics, so we will keep on observing what will happen.

Bibliography:

"Seoul Shares Open Higher on Yen's Rise-The Korea Herald." Seoul Shares Open Higher on Yen's Rise-The Korea Herald. N.p., n.d. Web. 04 June 2013. <http://www.koreaherald.com/view.php?ud=20130604000260>.

Week 8 - Friday (City Analysis)

1. Where does Seoul fall in the hierarchy of Central Places?

            Seoul, South Korea, is a national metropolis. The word metropolis comes from Greek, meaning "mother of a city." If any city deserves this title, it would be Seoul. The criteria of metropolis lies in its size, its presence as a center for economic, political and cultural activities as well as its being a hub for international connections, commerce and communications.

            Seoul is the world's second largest metropolitan area with almost 26 million residents after Tokyo, Japan. Seoul has the world's fourth largest metropolitan economy with a GDP of USD 773.9 billion after Tokyo, Los Angeles and New York City. Seoul also boasts of cultural landmarks such as Lotte World (the world's largest indoor theme park), Moonlight Rainbow Fountain (the world's longest bridge fountain) and CGV Starium (the world's largest movie screen).

            As a world leading technology hub, it headquarters multinational companies such as Samsung (the world's largest technology), LG and Hyuudai-Kia. Seoul's advanced technology infrastructure allows the world's fastest internet connections. The quality of life in Seoul is higher than those of New York City and London but lower than those of Tokyo and Paris according to the United Nations.

            The Seoul Station, the main terminal of Korean high-speed rail and the Seoul subway system, is the world's largest subway network by length and is considered one of the best. Seoul also is connected to Incheon International Airport, which is rated the world's best airport for seven years in a row by Airports Council International. Seoul hosted 1988 Summer Olympics, 2002 FIFA World Cup, and the 2010 G-20 Seoul summit.

2. What does Seoul offer that would not be available in a smaller place? What is unavailable locally, but that would be available in a higher order city?

           

            Compared to other Korean cities, Seoul offers variety of choices one can make. It has more college and universities than any other cities. It offers consumers with more choices in clothing, bars, drinks, restaurants and other things. The variety of people is also available. Home over 632,000 international residents, one can definitely spot more foreigners on the streets of Seoul than on those of other smaller cities.

            Seoul as a national metropolis has everything any other major cities can offer. An interesting question, we can ask ourselves is what can a hamlet offer that Seoul cannot? Something Seoul cannot offer is very specified demands. Let's say that the owner of Samsung wants a pair of shoes from a certain Italian shoemaker. If the shoemaker happens to live in a small town or a hamlet, then the hamlet or the town has something that Seoul cannot possibly offer. Of course, the variety of shoes that Seoul has will never be outmatched by the hamlet, but it is interesting to note that even a national metropolis has something that does not have locally.

Week 8 - Friday (EGT Consulting: Vehicle Market Executive Summary)

Republic of Korea is a very developed country. Starting a new business is easy and simple.  The country is open to global trade and investment and the rule of law is upheld. However, some corruption exist denting the foundation of Korean economy.

            Motor scooters, which is geared towards low-income countries, will have a little market potential in South Korea.  The luxury limousine will have some market potential, but a lot lower than that of the sedan. Thus, we strongly recommend the sedans, which will be best sold.

            The chosen product is most likely be shipped to Busan Port: the largest port in South Korea. Once the containers arrive in Busan, they will be distributed by Korea Railroad Corporation (Korail) using freight trains. Finally, the two main competitions are Hyundai Motor Company and the public transportations.

Week 8 - Wednesday (News Assignment)

Recently, low-income families debt holdings stood low whereas income growth remained unchanged. So, on May 9th, the Bank of Korea cut the seven-day repo rate by a quarter percentage to 2.5 percent. As part of government's stimulus drive, the cut aimed to ease low-income families debt burdens. The rate reduction will gift the lowest 20 percent income group with yearly savings of 16,000 won in interest-payment costs. However, their interest income can decline by an average of 27,000 won annually.

            "The calculation was made based on the premise that their savings and financial debt move in tandem with changes in interest rates." However, their calculation can take another turn for worse as it gives households incentives to borrow more money while easing the burden of repaying interest.

            The economic downturn led to a situation where the low-income families hold savings worth an average of 10.87 million won and financial debt of 63.2 million won on average. A rate reduction is effective only for some low-income families with high debt, but not for the lowest income group in general. The calculation must have been made with those with financial debt among the lowest 20 percent income bracket, in which the rate cut could bring such people a profit of around 14,000 won annually. Thus, the better way to fix the problem would be to take into account of all the low income families, not just ones with debt crisis. The ones with a lot of debt should be treated separately, that way more people can benefit from the policy. The new policy will take time and money, but eventually it will lead to better future for Korea.

Bibliography:
"Rate Cut May Not Help Ease Poor Families' Debt Burdens-The Korea Herald." Rate Cut May Not Help Ease Poor Families' Debt Burdens-The Korea Herald. N.p., n.d. Web. 13 May 2013.

Week 6 - Friday (The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger)

a. Identify a selection from this chapter that you found particularly interesting and explain why you selected it.

"What is it about the container that is so important? Surely not the thing itself. A soulless aluminum or steel box held together with welds and rivets, with a wooden floor and two enormous doors at one end: the standard container has all the romance of a tin can. The value of this utilitarian object lies not in what it is, but in how it is used. The container is at the core of a highly automated system for moving goods from anywhere, to anywhere, with a minimum of cost and complication on the way."

The selection basically summarizes everything the chapter has to offer and poses the question that everyone should ask first: what really is so special about the container anyways? Containers have no engine, no wheels. It does not provide people with enough fascination to captivate their attentions unlike ships, trains and planes. They lack the flash to draw attention from those who study technological innovation. What effect can this possibly have on global economy? According to author, its impact is grand.

b. How does author see the development of the shipping container contributing to globalization?

            Just as you should not judge a book by its cover, do not look down on the shipping container because it lacks fancy look. The author speaks very highly of it, because of its impact on globalization. "The container is at the core of a highly automated system for moving goods from anywhere, to anywhere, with a minimum of cost and complication on the way." The container made it possible for the shipping system to become cheap and impact global economy.

One thing author admits is that it destroyed the old economy. However, it led to a new one, if not better one. "Sleepy harbors such as Busan and Seattle moved into the front ranks of the world's ports." Large new ports popped up in England and Thailand where none existed before.

            "Those who had no wish to go international, who sought only to serve their local clientele, learned that they had no choice: like it or not, they were competing globally because the global market was coming to them. "This new system allowed firms whose ambitions had been purely domestic to become international companies; it became feasible to export their products to faraway places just as easily as to places nearby.

c. Who do you see gaining & losing from this transformation of global transportation?

Winners:

1) Consumers: they enjoy more choices due to the global trade the container has stimulated. "By one careful study, the United States imported four times as many varieties of goods in 2002 as in 1972." Also, the ready availability of inexpensive imported consumer goods has boosted living standards around the world.

2) Exporters and importers: they have easier time transporting their products in and out of the country.

Loser:

1) Customs inspectors and security officials: although each container has listing of its contents, neither ship lines nor ports can vouch that the list is telling the truth. Also, there exists no easy way of checking: "opening the doors at the end of the box normally reveals only a wall of paperboard cartons."

Week 6 - Wednesday (News Assignment)

            Korea aim to develop infrastructure projects around the world. South Korea is known as one of Four Asian Tigers, whose exceptionally high growth rates and fast industrialization between 1960s and 1990s developed the nations into advanced and high-income countries. With "rapid growth largely took place in line with strategic infrastructure development" Korea is inspiring other developing countries worldwide.

            Korea is excellent in new town development, water management and traffic administration. Korean infrastructure builders are recognized widely especially for their construction speed; their skills also combine advanced information technology with the facilities of the newly built cities. Through the implementation of the four-river restoration project, which helped prevent floods and droughts, Korea proved itself in excellence in water management. Finally, Korea's skills in transport infrastructure can be looked at with high-speed railways and international airports that have long been recognized as model examples for their efficiency. With such high level of skills comes extra demand. Increase in demand will lead to increase in Korea's income level and eventually its GDP.

            More so than other systems, Infrastructure needs the government’s active assistance and leadership. Good news is that the ministry’s target for overseas construction deals this year is $70 billion, almost five billion increase from the original $64.9 billion. With such high goal, continued development and promotion of Korea infrastructure is crucial.

Bibliography:

"Korea to Export Infrastructure Development Know-how-The Korea Herald." Korea to Export Infrastructure Development Know-how-The Korea Herald. N.p., n.d. Web. 07 May 2013.