Wednesday, March 25, 2009

Japanese Export Dive or Just a Reversion to Mean Growth?

Bloomberg reports:

Japan’s exports plunged a record 49.4 percent in February as deepening recessions in the U.S. and Europe sapped demand for the country’s cars and electronics. Shipments to the U.S., the country’s biggest market, tumbled an unprecedented 58.4 percent from a year earlier, the Finance Ministry said today in Tokyo. Automobile exports slid 70.9 percent.

The collapse signals gross domestic product may shrink this quarter at a similar pace to the annualized 12.1 percent contraction posted in the previous three months, the sharpest since 1974. Prime Minister Taro Aso is compiling his third stimulus package as companies from Toyota Motor Corp. to Panasonic Corp. fire thousands of workers.

I chose to show it in linear scale because I don't necessarily believe trade is based on compounded growth (such as the case with GDP or equity price levels), BUT I was requested to do so, so here is...

In this case, it appears Japan has in fact reverted well through the long term pattern.
Is it possible this is just the end of the "globalization bubble"?

Source: TSOJ


  1. That doesn't look like the mean to me.

  2. how do you figure? if you took growth from the 1980's and continued the trend line, you would get to exactly where japan's exports are today

  3. if they fall a little bit more, Japan's exports will have the graph of a random walk without drift

  4. great chart - thanks a lot!

    if this chart would show any stock (markwet), i would 100% agree - it´s a bubble that burst.

    i´m not surewhat effect the desperate reflating measures around the world will have on global trade.

    but one thing seems sure to me: companies will have to operate on these lower levels for many years to come.

  5. Your y-axis is linear and your growth trend is a line. Try it again with either a logarithmic y-axis or an exponential growth trend.