Friday, December 12, 2008
Restoring Japan's Economic Growth
The wonders of inter-library loans. I am not sure why I did not discover them early on in my academic career. Anyway, Adam Posen disects Japan's lack of growth through-out most of the 1990s after having given a scarce to the American right with its rapid qnd constant growth only a decade earlier. Basically, he applies Keynes to Japan and thoroughly analyzes why a fiscal push would help jump-start the country's economy. I don't want to go into too much detail on this, but he shows in a very convincing manner how what has been called fiscal expansions in Japan have in fact been mere collections of spendings already planned leading to a budget deficit lower than the Maastricht Criteria, lower than most Western European econolies at the time (none of whom had to deal with a major recession).