EGT Final Relection

Bharath Kotha

Final Reflection

a. This class has taught me many things that can be directly applied to understanding how the world works. I have learned how different geographies and cultures have been and will continue to be vital for constant innovation. At the start of this class we saw how different geographical environments and climates made it so that different areas in the world would develop differently. This geographical aspect was a reoccurring theme throughout the quarter as we also learned about how important geography is for transportation. Before this class I never realized how important geography was and still is for the development in different regions. This has showed me the importance of location and geography in learning how global trade works, and how the world works.

b. The main topics I am interested in are globalizations and economics geography. I believe that learning about economic geography has many real life purposes and that studying market distributions in different regions is very interesting. Specifically, I think studying the varying transportation costs and social factors in different places is very interesting. I also think it would be fascinating to compare these factors in small, rural areas versus large, populated cities.

c. Since  I will not be studying away or abroad next year, I believe that my biggest challenge next year will be studying and preparing for my MCAT exam in November. I am very nervous for this exam but I believe that with the correct preparation and studying, I will be able to succeed and do well on it. This is a very big deal for me because the MCAT is the medical school entrance exam, and since my ultimate goal is to go to medical school and become a pediatric cardiologist, it is vital for my future to do well on this exam. This exam is known to be extremely difficult, but I believe that if I study hard all summer as well as continue to study during fall quarter of next year, I will be able to achieve my goal and do well on this exam, which will help me get into medical school. 

EGT: City Analysis

Analysis of Naples

            Naples is near the top of the hierarchy of Central Places and it is the third largest city in Italy by population (1,046,987). Naples is in the same category of Central Places as Milan and Turin, the second and fourth largest Italian cities respectively. These three cities have populations around 1,000,000. While this population is low compared to other Regional Metropolises, in Italy, Naples is considered to a Regional Metropolis. The largest city in Italy is Rome, which sits at the top of the Central Place hierarchy as a National Metropolis. Although it’s population of 2,648,843, is smaller than that of other National Metropolises such as London and Chicago (around 9 or 10 million each), it is still one of the largest cities in all of Europe. Lower on the Central Place hierarchy are Regional Cities such as Genoa with a population of 655,704, and Small Cities such as Trieste with a population of 222,589.

           

            As a Regional Metropolis, Naples has more has many advantages over Regional and Small cities. For example, there is a complete international airport in Naples, which the smaller cities do not have. This airport is efficiently used in Naples due to the large population. Naples also has more hospital than the smaller cities. In addition, compared to smaller cities, Naples has many more tourist attraction such as its proximity to Mt. Vesuvius, and Pompeii, the National Archaeological Museum, and the fact that it is the birthplace of Pizza.  Also Naples is home to one of the largest shipping ports in Italy, and and has a very prevalent waterfront, which is unavailable in most Italian cities. However, Rome is the largest city in Italy, and while it cannot match some of these historical aspects, Rome has more to offer than any other city in Italy. While Rome is not the biggest industry or shopping city in Italy (Milan is the biggest for both), it still has more to offer. In addition to having a larger population, more hospital, and more airports than other cities in Italy, Rome is also home to the Italian government, and is where the largest courts are located. In addition, the historical importance of Rome is part of what makes it so special. Rome was the heart of the Roman Empire and signs can still be seen everywhere, and this is part of the reason that Rome grew so quickly. In addition, Rome is also home to many sports teams, and the Coliseum, which are also only unique to Rome. Also, while Milan has population similar to that of Naples it is a bigger Regional Metropolis due to its many sports teams, and since it is the financial an industrial capital of Italy.

          

EGT Italian News

Italy News Summary

            Recently there have been many complaints by Italian business about  the banking system, which should be one of the best in Europe. While Italian banks avoided the toxic financial instruments and there has not been a housing bust, Italian banks are hurt by bed debts from all types of Italian businesses. In fact these debts are increasing by around 20% a year and represent more than 8% of all bank loans (almost 17% of GDP). Some factors for the increasing business debts are the Italian economy which has been shrinking for the past few years, and a slow legal systems (which makes it difficult for creditors to recover owed money). In addition, Italian banks have extended loans to many companies that will not repay them. For example "Alberto Gallo of Royal Bank of Scotland reckons that some 30% of Italian firms owe five times or more than their annual earnings before interest, tax, depreciation and amortisation". 

             Italian bankers are also contributing to the downward spiral, by not giving growing firms loans. Bankers are faced with the possibilities of large write-offs, therefore they do not want to take risks. This lack of loaning hurts the businesses as well. For example, only about a quarter of loan applications were approved, and lending to non-financial firms fell by 9% in the last two years (ECB). 

          This banking crisis will hurt many companies, and if bankers do not start giving loans to growing companies, than this could cause the economy to stagnate. As a result some of these companies may go out of business, which will increase the unemployment rate and lower the GDP. 

        This situation was initiated by the economic crisis of 2008. The recession hurt Italy particularly hard and it has had a hard time recovering. Therefore the mismanagement of loans by banks companies, and the dis-functioning banking system is continuing to hurt the economy. In fact, weak banks are essentially squeezing the life out of the Italian economy, and it has caused some big companies to reconsider asking banks for help

has only continued to hurt the banking system. In fac 

EGT: Junkyard Planet by Adam Minter

Junkyard Planet

1. Although India and China are both rapidly industrializing countries with a large demand for resources, the vast majority of U.S scrap metal goes to China and India's scrap metal imports are fraction of China's. This disparity is cause by various factors. For example, the Chinese price for the product is usually better than the Indian price, therefore shipping to China will yield a higher profit. A reason for the reason difference is that price in China is driven by desperate demand which makes it better than India's price. Another reason China exports more scrap metal is because the price to ship from Los Angeles to Yantian (or just the U.S to China) is significantly cheaper than the price to ship to the scrap metal ports in India. This difference in shipping price is caused because China exports many more products to the West Coast of the U.S than India does.

2. A passage that I found interesting is on page 100, when Minter is speaking to Sunil and writes

"Where, I ask will he get all of the metal? "I have a new trading office in Dubai", he says "I'll source it there."... I become aware that he longs for the opportunity to buy and ship scrap from the United States, the Saudi Arabia of Scrap. Once or twice he even asks if I might introduce him to a few U.S scrapyards that might be interested in doing business with him. I decline the opportunity... I tell him, "the cost of shipping would kill a deal. He nods silently but I can see his stony, disappointed face that he has witnessed what I know well: the bounty of an American scrapyard"".

I found this paragraph and passage very interesting and it provides a perfect illustration of globalization and global shipping today. Although Sunil is able to import the amount of metal he needs from Dubai, he wants import scrap metal from the  U.S very badly, and finds that it is currently unrealistic. This is because although, global trade is very big, the cost of shipping from India to U.S is great to make a difference. As I said previously, since the cost of shipping to India is greater than shipping to China, the majority of U.S scrap metal is sent to China. However, India is still able to be a major by importing scrap metal from all over the Middle East, because the transportation costs to India in this case would be cheaper.

3. The modern transportation in this article is related to Jared Diamond's article "Why Did Human History Unfold Differently On Different Continents For The Last 13,000 Years" because the main countries involved in modern global transportation are countries that are able to ship globally and participate in the global market. The are mostly developed countries such as the U.S and countries in Europe, or countries that are developing and are important players in global trade. Also in modern transportation a country must have the resources, and infrastructure to be able to send large shipping containers globally. For example in Sudan, where the labor prices are very low they are unable to be major players in the global market because " Sudan doesn't have many factories" and lacks end markets. Therefore Sudan actually exports more scrap metal to India and China. Sudan is unable to compete because as Diamond spoke about due to their geography and climate it is still proving difficult for Sudan to transform into a strong stable developing country.
             
             In addition this article talks about some geographic topics that were are consistent with the geographic topics in Jared Diamond's article. For example, when Minter compares the U.S shipping to China versus India, he shows that although they are both developing and rapidly growing countries, the U.S ships more to India because it is the transportation cost is cheaper due to their geographical location. Just as Diamond wrote in his article, Minter also proves that geographical locations are major factors in the success of different areas. Both these articles agree that industries and civilization have flourished and succeeded greatly in favorable geographic locations, while areas that might have other advantages and resource but are in less favorable locations do not get the same advantages. 

EGT: How the Shipping Container Changed the World Economy

"The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger"

1. In Chapter one of "The Box: How the Shipping Container Made the World Smaller and World Economy Bigger", Marc Levinson writes "The key question asked today is no longer how much capital and labor an economy can amass, but how innovation helps employ those resources more effectively to produce more goods and services. " He then goes on to say "Even after a new technology is proven, its spread must often wait until prior investments have been recouped..."and " The economic benefits arise not from innovation itself, but from the entrepreneurs who eventually discover ways to put innovations to practical use...". I found these quotes very interesting because it shows that regardless of what the invention is and who made it, the main benefit of the product will be from the practical implication. For example the use of shipping containers increased dramatically and shipping became faster, more efficient, cheaper and less risky (human risk), only after there was programming of the containers. This programming signaled the end of chaos of the old-time pier at major container terminals. This programming allowed for movements of a vessel to be programmed. 

2. The the development of the shipping container completely changed and brought globalization to a new stage. This development made shipping globally faster, less risky and most importantly cheaper.  The shipping container allowed small cities to take advantage of cheap land and low wages to bring more factories for cheaper transportation. Therefore as more small cities got more factories, they were able to get more involved in global transportation and were able to be major players. In addition Levinson also writes "the cost of bringing raw materials in and sending finished goods out had dropped like a stone" after the development and spread of shipping containers. When he says this, it shows why companies were allowed to move to smaller cites and how the cost of transportation was cheaper. 

3. In this transformation of global transportation the consumers are the main beneficiaries and benefit in various ways, while smaller companies are suffering. First of all, the increase of global transportation and containers increase the number of choices of a product available to consumer. This increase of choices creates more competition and helps regulate prices. The container transportation also helps lower prices because it lowers the transportation cost for the producers, and due to the lower transportation cost, the producers will cut the prices of the products. Local businesses and and countries that want to stay domestic are hurt by globalization because they are forced to play against bigger more global companies in the worldwide economy. This increase of unwanted competition forces the smaller businesses to decrease their price, and in extreme cases  the pressure from foreign producers can force the the local business to close. In addition, the increase of global transportation from the increase of shipping containers, can have a negative impact on unemployment. This is because suppliers can move to other smaller and cheaper countries to take advantage of the lower wages of the workers in the smaller, and underdeveloped places. 

EGT: Italian News

 Until the final quarter of 2013, the Italian economy had shrunk for nine consecutive, and the economy is smaller than it was 14 years ago, and unemployment is near 13 percent. In the final quarter of 2013, the Italian economy grew by 0.3% and this was considered a great improvement, and the overall consumer confidence for the next year is the highest since 2002. There was a new consumer confidence survey given in April and 44.2% of the respondents expected the economy to be good a year from now. This is the highest level of optimism since 1996.

                  There is currently a government proposal to raise domestic demand and increase jobs. Prime Minster Matteo Renzi also wants to reduce income taxes while raising taxes on income from financial instruments. However, the main reason for this confidence, is that the euro zone crisis has seemed to ease, and the Italian stock market has gone up 25% in the last year.  The consumer confidence survey also shows that although the unemployment rate is high and the economic growth (GDP) is stagnant, both figures are expected rise within the next year, as well as a decrease in government borrowing costs.  

                  This article relates to our study of GDP. For example, the expectation of unemployment would increase the consumption aspect of GDP, because as more people are employed and have an income, they will be willing to spend more and buy items. This will increase consumption. In addition a decrease of government spending will also increase the GDP, by increasing the government aspect. If the government borrows less money, and if it makes more money from taxing financial instruments rather than normal income taxes, this will raise the government aspect (less borrowing), as well as the consumption aspect (the decrease on income taxes will lead to more consumption).

                 

 http://www.nytimes.com/2014/05/03/business/economy/optimism-grows-in-italy-defying-the-numbers.html?_r=0

EGT: Italian News

 Until the final quarter of 2013, the Italian economy had shrunk for nine consecutive, and the economy is smaller than it was 14 years ago, and unemployment is near 13 percent. In the final quarter of 2013, the Italian economy grew by 0.3% and this was considered a great improvement, and the overall consumer confidence for the next year is the highest since 2002. There was a new consumer confidence survey given in April and 44.2% of the respondents expected the economy to be good a year from now. This is the highest level of optimism since 1996.

                  There is currently a government proposal to raise domestic demand and increase jobs. Prime Minster Matteo Renzi also wants to reduce income taxes while raising taxes on income from financial instruments. However, the main reason for this confidence, is that the euro zone crisis has seemed to ease, and the Italian stock market has gone up 25% in the last year.  The consumer confidence survey also shows that although the unemployment rate is high and the economic growth (GDP) is stagnant, both figures are expected rise within the next year, as well as a decrease in government borrowing costs.  

                  This article relates to our study of GDP. For example, the expectation of unemployment would increase the consumption aspect of GDP, because as more people are employed and have an income, they will be willing to spend more and buy items. This will increase consumption. In addition a decrease of government spending will also increase the GDP, by increasing the government aspect. If the government borrows less money, and if it makes more money from taxing financial instruments rather than normal income taxes, this will raise the government aspect (less borrowing), as well as the consumption aspect (the decrease on income taxes will lead to more consumption).

                 

 http://www.nytimes.com/2014/05/03/business/economy/optimism-grows-in-italy-defying-the-numbers.html?_r=0