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51 Responses to “The Economics of Japan’s Lost Decades”
Page 24: “Government deficits have prevented collapse in economic activity, and higher taxes and reforms aimed at fiscal consolidation have been counterproductive. Further, the Bank of Japan can keep Japanese government bond yields low as long as it deems necessary;
worrying about Japanese government bond yields spiking sharply due to elevated government debt levels is not warranted given that Japan has a sovereign currency and thus no restraints on its ability to service its government debt…..”
That goes into the right direction, especially p 24.
I see references to Tcherneva, Hudson, Post-Keynesian conference in Kansas City.
And that from a Dutch bank!! That must give you hope for the eurozone….
Present developments around the BOJ role are also pretty MMT style I think, do you agree?
Hi Warren, would you say a lot of countries in Asia are heading the way of Japan, with the rising property prices in Hong Kong, Singapore, Australia etc in mind? When interest rates go up, will it all come down? And will therefore interest rates probably stay low for a very very long time (way beyond 2015)..
The Japanese export-dependant economy will be allowed to “recover” – probably just for a while until is steam-rolled by the other emerging superpower. Plaza Accords clipped their wings. Now they are allowed to slowly regain their export competitiveness. This is all 100% political – it is a part of the Anti-Chinese “pivot” strategy.
If anyone had any doubts about the Diaouy Islands / Japanese Militarism Revival issue, the American attitude towards slaughtering whales clearly shows what’s really going on.
Just like in 1945-50 when some leading Japanese war criminals including the Japanese Emperor were allowed to remain free / stay in power (and help uniting the Japanese society against the communist threat), the so-called “values” (and whales) are sacrificed in 2012 for short term political gains.
Mr Obama should consider a completely different kind of “pivot”. Instead of oiling the rusty war machine why can’t the American compete peacefully with the Chinese in education, science, advanced technology, etc?
More internal stimulus to offset deflation would be available in Japan if the monetary transmission channel wasn’t dependant on the lending decisions of commercial banks. Simply modify the central bank so it deals directly with the public in conducting monetary policy.