So why would the Japanese government build so many airports, and what problems has this caused?
Aiports create a lot of positive externalities (though their level of negative externalities stops them from being classified as merit goods) so building new aiports should increase these.
Generally, improvements in infrastructure are seen as being good for the economy, but I guess this is a clear example where the government has produced a non socially optimum output. Equally clearly, this has wasted many resources which would have a more effective opportunity cost use.
Why has the government done this? Is it simply a matter of a stupid misjudgement of how many airports the country needs? Read the rest of the article here, and see if you can find out the possible answer.
The japanese economy seems to be somewhat a mystery for me, especially after the recession in the early 90s. There are news saying that Japan is not doing well, but at the same time, we could always read news about the new inventions that the Japanese have come up with. It is interesting to see the government actions and the growth of the economy, especially in the hi-tech sector.
ReplyDeleteThank you for sharing.
X Shuting
The Japanese economy is interesting since its economic situation has been very different from the rest of the world for some time now (since the early 1990s) and not too good!
ReplyDeleteI feel the stirrings of a future post.......