Reflection

I learned in this class how to look at studying abroad economically. I also learned how to interact in a global market in an economic fashion. I now feel more comfortable in ideas of exchange rates, arbitrage and financial crisis. I also have learned how to view cultures differently; cultures  are stereotyped and when going into a different culture (in business or for travel) it is important to understand that the people within that culture view life and transactions differently than I do.

I would really love to learn more about global business and the intricacies of doing business on a global scale; what makes one business succeed globally where another does not?

I would tell them to take the class; it is very beneficial and enjoyable. I've learned a lot. The only true warning I have is that it is very end heavy, so, if you prefer classes that are more work intensive in the beginning of the quarter that slowly taper off, this may not be the class for you.

Week 10 Blog

In Yusuf Mansur's Electricity and Other Prices, Mansur discusses the effect raising electricity prices by 10%. He calculates that by doing this, most institutions will lose productivity by 1.6%. In industries that use large amounts of energy draining equipment, with electricity being about 30% of their production costs, this could be devastating. In a small economy, like Jordan's, any company that closes down or leaves the country could be detrimental to the country's GDP. This could also lead to increased unemployment, and also an increase in inflation (which would hurt net exports and thus hurt GDP more).
Mansur further explains that the key target for this is to lower large consumption of energy from households who waste large quantities of energy. Unfortunately, this law is not targeting the people who can afford it; it is targeting corporations that will shut down due to this increase.
This shows how important governments are in helping economies thrive. One poor decision could lead to a serious economic problem.

Week 9 post

In the article, Community water saving project to receive cash influx amid huge demand, by

Hana Namrouqa, the author writes about the water shortage in Jordan and about how a community is saving water in every way possible. This has become very economically beneficial for the community who started this. In order to analyze why, lets have a look at everyone's favorite, supply and demand. When the quantity supplied of a good is less than the quantity demand for that good, it is called a shortage. When this happens, price for this good remains higher than the market equilibrium. When this happens, normally suppliers will produce more of the good and the market will return to equilibrium. In this instance, it is rather difficult to supply more water, so, the market for water in Jordan is a very viable market for supplies who can obtain water. Who knew water could make bank?

Greek Debt is the fiscal tragedy of the times, and of the banks

In the article, Beware of Greeks Bearing Bonds, by Michael Lewis, a passage I found interesting was,“The Greek people never learned to pay their taxes .... because no one is ever punished. It’s like a gentleman not opening a door for a lady”. This passage shows how important law enforcement is to a country's well being. In order for a country to function, the laws put into place must be enforced, if not, anyone and everyone will take advantage of the system. This is shown in Greece when the author describes how everyone evades taxes, if the laws in place were enforced, all of the doctors in the country would go to prison. This lack of enforcing the laws lead to a society where fudging numbers is common place; the Greek government even did this when getting into the European Union. This continual breaking of laws led Greece to its economic downturn. The government and the people cheated their way into a financial ditch.

Greece's problems threaten the EEU because the financial rigor involved in joining the union gave investors and bankers a fake sense of security in Greece's financial stability. This caused other nations and private investors to loan money and put money into Greece and these groups will not be paid back. That is a significant loss for countries teetering on the edge of bankruptcy. Also, government bonds lost value which will cause the Euro will depreciate. This in turn causes any investment in Euros to decrease in purchasing power, thus affecting all of the countries using the Euro.

The formula for short run national income is, GDP=G+I+C+NX. With this bailout plan, government spending is reduced, lowering G, and taxes are raised, which takes money out of the pockets of people who could spend it, lowering C. This will cause overall GDP to decrease as well. The reason why people are opposing these measures are because:

1. People always want more money, raising taxes will cut into that.
2. A reduction in government spending encompasses many areas, like labor, wages, and public domain goods (roads, retirement, public education, etc). Obviously all of these will significantly affect the public. Any government worker will detest the lowering in wages and will not enjoy layoffs. Any person with children will not enjoy the public school quality decreasing (even more) and any older person will dislike retirement ages being older. This policy will affect everyone in Greece.

Week 8 Post

In the article, Tourism Revenues Increase by 10.5%, the author talks about how by the end of April, tourism in Jordan increased by 10.5% from March's revenues and 20.6% from the year before. This is good for Jordan's economy because it allows for more jobs in the tourism industry and it help's Jordan's GDP. Tourism is considered a service export in GDP, so, the rise in tourism in Jordan increases net exports which increases GDP.

Speaking of increased tourism in Jordan, the king of Jordan is building a Star Trek theme park! It began construction March of this year. It is planned to have four hotels and 17 attractions. Because this is the first of its kind for this franchise, and because there are many hardcore Star Trek fans throughout the world, it is very possible to see tourism in Jordan significantly peak again once this project is finished. I guess a king's childhood tv show will lead to some spectacular increases in Jordan's GDP.

Walmart in China

 Excuse me for the lack of punnery today, I have a rather nasty migraine today and do not seem to be mentally coherent. This may be a jumble of things that don't make sense. Sorry

a. "As it happened, just at this time, growing numbers of Chinese were also becoming worried, even frightened and angry, about pollution, adulterated foods, and the corruption that kept local government agencies from taking remedial actions. And because more and more Chinese were not only erupting into spontaneous protests as a way to get action, but also looking to NGOs rather than to the government for relief, and because even the press had become more activist, the government became concerned about the impact of environmental damage on the stability of the country. The number of scares involving illegal chemical additives in food was creating particular alarm. In 2008, milk products were found to contain melamine, a coal-based industrial chemical that, when ingested, can cause kidney stones and renal failure. (Melamine had been regularly used to give milk powder and baby formula a seemingly higher protein content.) As a result, some 300,000 Chinese consumers were sickened and at least six infants died. The Chinese government reorganized its food-inspection system in response, and its new Food Safety Law went into effect in 2009. Nonetheless, the dairy industry was hit again with scandals this year. In the spring, hundreds were sent to the hospital when hogs from 16 provinces were found to have been fed a “lean meat powder” containing the toxic chemical additives ractopamine or clenbuterol, to produce less-fatty pork. In Guangdong province, authorities discovered and destroyed 45 tons of vermicelli noodles adulterated with industrial wax and ink; in Shenyang, police seized 40 tons of bean sprouts that had been illegally bathed in urea, sodium nitrite, antibiotics, and the plant hormone 6-benzyladenine, to make them grow faster and appear fresher. The food-safety situation became so serious that on April 14, Premier Wen Jiabao took the unprecedented step of speaking out, saying the recent scandals indicated that “dishonesty and moral degradation” had become a serious problem." 

This passage is a very strong reminder that governmental regulations of food products is not where it is in the US. This is why Walmart's strong food standards has been so beneficial for the Chinese people. They are relieved to know that Walmart is a safe haven for food and they don't have to worry as much about the food that they consume there.

b. In the article, Schell writes about how Walmart's business practices and China's government practices actually correspond. because of this, the Chinese people find comfort in Walmart's presence. Because many food markets in China are inconsistent and do not sell quality product, the fact that Walmart is a safe presence is a good thing in China. This safety allows for a beneficial interaction between the average Chinese citizen and Walmart. This reliability allows Walmart to be successfully integrated into Chinese culture. Also, the Walmarts in China are helping push the 'green' movement in China, thus allowing this movement to be more widespread. If this message comes from a reliable store and the government, the movement must also be reliable. Also, because this movement is important in Chinese culture, by Walmart reflecting this, it allows for more sales. Walmart also pressured its supplies to follow suit. So, in this aspect, Walmart's presence helped set the green movement into action in China.

c. Many multinational firms impact style trends in cultures today and also reflect the current trends. Nike dictates the 'cool' shoe to wear by having popular sports players wear the shoes. Popular clothing lines dictate the 'in' colors, shapes and fashions. If these business continually change the 'in' product, people will have incentives to continually change their wardrobe. Currently, many food manufacturers are responding to the health food and organic movement by advertising their products as pure or healthy. Because corporations want to make money, if they reflect important issues in society, they can see an increase in sales. Currently, healthy and organic attracts customers.

Week 7 weekly blog post

The article Jordan's economy may grow by 3 percent in 2012, describes how Jordan's Deputy Central Bank Governor Maher Sheikh Hasan expects the Jordan's GDP to grow between 2.8 percent to 3 percent this year compared with 2.6 percent last year. 
The nation's higher energy bill caused the government to look to lower public spending. Sheikh Hasan wants energy rationing, because he says that anything sold at less than its real cost causes more demand of it. If the government does this, Hasan says inflation will rise, which will add to the Jordan's financial issues.


This is good because any increase in GDP will greatly effect the nation's rather small GDP. 

If the government rations the energy bill, it may be a good idea. In the supply and demand curves of this market, there would be a shortage of energy, because there cannot really be a shortage of energy, excess energy is used. If the energy is rationed, it would return the supply and demand curve of this market to equilibrium and lower the energy bill (because excess energy will not be consumed now.