MIT Libraries logoDSpace@MIT

MIT
View Item 
  • DSpace@MIT Home
  • Center for International Studies (CIS)
  • MIT Japan Program
  • MIT Japan Program Working Paper Series
  • View Item
  • DSpace@MIT Home
  • Center for International Studies (CIS)
  • MIT Japan Program
  • MIT Japan Program Working Paper Series
  • View Item
JavaScript is disabled for your browser. Some features of this site may not work without it.

Whither Japan's Economy?

Author(s)
Bertoldi, Moreno
Thumbnail
DownloadJP-WP-03-02.pdf (3.855Mb)
Metadata
Show full item record
Abstract
The Japanese economy entered a long recession in spring 1997. Its economic growth has been much lower than in the US and the EU despite large fiscal stimulus packages, a monetary policy which has brought interest rates to zero since 1999, injections of public money to recapitalize banks, and programs of liberalization and deregulation. How could all these policies have failed to bring the Japanese economy back on a sustainable growth path? This paper argues that the failure of Japan's efforts to restore a sound economic environment is the result of having deliberately chosen inappropriate and inadequate monetary and fiscal instruments to tackle the macroeconomic and structural problems that have burdened the Japanese economy since the burst of the financial bubble at the beginning of the 90s. These choices were deliberate, since the "right" policies (in primis the resolution of the banking crisis) presented unbearable political costs, not only for the ruling parties, but also for the bureaucratic and business elites. The misfortunes of the Japanese economy during the long recession not only allow us to draw important economic policy lessons, but also stimulate reflections on the disruptive role on economic policies caused by powerful vested interests when an economy needs broad and deep structural changes. The final part of the paper focuses on ways to tackle Japan's banking crisis. In particular, it explores the Scandinavian solution, which, mutatis mutandis, might serve Japanese policy-makers well.
Description
The views expressed here are solely those of the author and do not necessarily reflect those of the European Commission. This paper is a revised and updated version of an article published in Stato e Mercato in 2002.
Date issued
2003-02
URI
http://hdl.handle.net/1721.1/7540
Publisher
MIT Japan Program
Series/Report no.
MITJP (Series);03.02

Collections
  • MIT Japan Program Working Paper Series

Browse

All of DSpaceCommunities & CollectionsBy Issue DateAuthorsTitlesSubjectsThis CollectionBy Issue DateAuthorsTitlesSubjects

My Account

Login

Statistics

OA StatisticsStatistics by CountryStatistics by Department
MIT Libraries
PrivacyPermissionsAccessibilityContact us
MIT
Content created by the MIT Libraries, CC BY-NC unless otherwise noted. Notify us about copyright concerns.