Japan's policy trap : dollars, deflation, and the crisis of Japanese finance / Akio Mikuni, R. Taggart Murphy.

Format:

Book

Author/Creator:

Mikuni, Akio, 1939-

Contributor:

Murphy, R. Taggart.

Language:

English

Subjects (All):

Balance of trade--Japan.

Balance of trade.

Political culture--Japan.

Political culture.

Japan--Foreign economic relations.

Japan.

Japan--Economic conditions--1989-.

Physical Description:

xiii, 294 p.

Edition:

1st ed.

Place of Publication:

Washington, D.C. : Brookings Institution Press, c2002.

Language Note:

English

Summary:

Until quite recently, the Japanese inspired a kind of puzzled awe. They had pulled themselves together from the ruin of war, built at breakneck speed a formidable array of export champions, and emerged as the world's number-two economy and largest net creditor nation. And they did it by flouting every rule of economic orthodoxy. But today only the puzzlement remains--at Japan's inability to arrest its economic decline, at its festering banking crisis, and at the dithering of its policymakers. Why can't the Japanese government find the political will to fix the country's problems? Japan's Policy Trap offers a provocative new analysis of the country's protracted economic stagnation. Japanese insider Akio Mikuni and long-term Japan resident R. Taggart Murphy contend that the country has landed in a policy trap that defies easy solution. The authors, who have together spent decades at the heart of Japanese finance, expose the deep-rooted political arrangements that have distorted Japan's monetary policy in a deflationary direction. They link Japan's economic difficulties to the Achilles' heel of the U.S. economy: the U.S. trade and current accounts deficits. For the last twenty years, Japan's dollar-denominated trade surplus has outstripped official reserves and currency in circulation. These huge accumulated surpluses have long exercised a growing and perverse influence on monetary policy, forcing Japan's authorities to support a build-up of deflationary dollars. Mikuni and Murphy trace the origins of Japan's policy trap far back into history, in the measures taken by Japan's officials to preserve their economic independence in what they saw as a hostile world. Mobilizing every resource to accumulate precious dollars, the authorities eventually found themselves coping with a hoard they could neither use nor exchange. To counteract the deflationary

impact, Japanese authorities resorted to the creation of yen liabilities unrelated to production via the large.

Contents:

The policy trap

The preservation of bureaucratic power

Monetary policy and mercantilism

Hoarding gold, hoarding dollars

Experimenting with bubbles

Of a great bubble and its collapse

The downward spiral

The policy trap revisited

The anomalies of contemporary Japan

The end of the Japanese system?

Notes:

Bibliographic Level Mode of Issuance: Monograph

Includes bibliographical references and index.

ISBN:

9786612758492

9781282758490

1282758497

9780815798767

0815798768

OCLC:

1017608543