Restoring Japan's economic growth
Will the Japanese government take the decisive but manageable policy actions needed to bring about economic recovery? Despite claims to the contrary, macroeconomic expansion has yet to be seriously tried in Japan. Only one-third of the announced stimulus packages of 1992-97 were actually undertaken. In addition, monetary expansion has been insufficient to prevent deflation. Actual stimulus packages in the form of permanent tax cuts should be 4 percent of GDP before the end of calendar year 1998 & the price level must be stabilized. Criticism of current Japanese macroeconomic & financial policies is so widespread that the reasons for it are assumed to be self-evident. In this volume, Adam Posen explains in depth why a shift in Japanese fiscal & monetary policies, as well as financial reform, would be in Japan's own self-interest. He demonstrates that Japanese economic stagnation in the 1990s is the result of mistaken policies of fiscal austerity & financial laissez-faire rather than any supposed structural failures of the "Japan Model." The author outlines a program for putting the country back on the path to solid economic growth - primarily through permanent tax cuts & monetary stabilization - & draws broader lessons to be learned from recent Japanese policy actions that led to country's continuing stagnation. Dr. Posen's objective analysis & comparative examples of policies from across the OECD are enhanced by the report's timeliness. His book should be required reading for Japan's business & academic communities, US foreign policy & financial players & central bank & treasury officials. As a deep analysis of a critical episode in economic policymaking, the book will be useful supplementary text for both under- & post-graduate level courses in macroeconomics, comparative political economy, Japan or East Asia studies, public finance & international relations.
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Macroeconomic Mistake Not Structural Stagnation
Fiscal Policy Works When It Is Tried
The Short and Long of Fiscal Policy
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aggregate demand Asian assets Bank of Japan banking system benefits Bergsten borrowers budget business cycle capital flight confidence contraction corporate costs countercyclical decline deflation deposit insurance discretionary fiscal policy discussed in chapter disintermediation downturn East Asia economic performance economic policy effects exchange rate expansionary Figure financial crisis financial reform financial system firms fiscal expansion fiscal policy fiscal stimulus Fred Bergsten funds goerrnment government bonds government debt growth rate incentive income increase interest rates investment ISBN paper Japanese banks Japanese economy Japanese financial system Japanese government Japanese policymakers Japanese savers lending liquidity long-run macroeconomic macroeconomic policy Ministry of Finance monetary policy OECD output gap percent of GDP political Postal Savings system potential growth potential output precautionary recession response rise risk sector short-run Source stabilization stagnation stimulus package structural reform tax cuts tion trade trillion yen United yen depreciation