OECD economic surveys : Japan 1998-1999 / Organisation for Economic Co-operation and Development.

Format:

Book

Author/Creator:

Organisation for Economic Co-operation and Development, issuing body.

Series:

OECD Economic Surveys: Japan

Language:

English

Subjects (All):

Economic history.

Japan--Economic conditions.

Japan.

Physical Description:

1 online resource (296 pages)

Edition:

1st ed.

Place of Publication:

Paris, France : OECD Publishing, [1999]

Language Note:

English

Summary:

Assessment and Recommendations I. Recent Trends and Prospects II. Monetary, Exchange Rate, and Financial-Sector Policy III. Fiscal Policy and Medium-Term Public Sector Issues IV. The Tax System: A Need for Comprehensive Reform V. Structural Reforms to Revitalize the Economy Annex I. Institutional Framework of the Local Allocation Tax (LAT) Annex II. Statutory Features of the Tax System and Key Elements of Recent Reforms Annex III. Taxation and Private Savings Annex IV. Chronology of Main Economic Events.

Contents:

Intro

Table of contents

Assessment and recommendations

I. Recent trends and prospects

Figure 1. Overall output and productivity performance, 1985-2000

Shrinking private demand in 1998

Figure 2. Industrial production and inventories

Figure 3. Contributions to real GDP growth

Table 1. Business investment by industry and firm size

Figure 4. Unemployment by age

Table 2. Severity of unemployment

Figure 5. Wage and salary developments

Table 3. Consumption growth by household type

External developments

Table 4. External trade

Figure 6. Import penetration and relative import prices

Table 5. Recent foreign direct investment flows

Downward pressures on prices

Figure 7. Inflation indicators

Effects of policy measures

Figure 8. Public works and its leading indicator

Figure 9. The effect of credit guarantees on the number of bankruptcies

Figure 10. Housing starts and the Housing Loan Corporation's (HLC) loans

Signs of a pick-up in private activity in 1999

Table 6. Recent monthly indicators

Restructuring in the non-financial business sector

The extent of excess labour

Figure 11. Firms' judgements as to their employment levels

Table 7. Employment adjustment measures in historical perspective

The problem of excess capital

Figure 12. Firms' judgements on their production capacity

Figure 13. Capacity utilisation in manufacturing

Figure 14. The deviation of the capital - potential output ratio from its trend

Figure 15. Capital-output ratios: an international comparison

Figure 16. The relationship between investment share and real growth

Excesses on the balance sheet: too much long-term debt and not enough profit

Figure 17. Corporate sector financial indicators

Efforts to alleviate the debt/capacity overhang and raise investment returns.

Figure 18. Corporate restructuring announcements

The outlook for the period to 2001

Table 8. Short-term outlook

II. Monetary, exchange rate and financial-sector policy and developments

Policy easings

Figure 19. Interest rates and monetary conditions

Figure 20. Call money market: transactions and outstandings

The recent debate

Is there a need to provide more stimulus?

Expanding the balance sheet of the central bank

Table 9. The evolution of the Bank of Japan's balance sheet, FY 1996-98

Intervening in exchange markets

Figure 21. Interest differentials and the effective exchange rate of the yen

Setting an inflation target

Money supply targeting

Figure 22. Monetary aggregates

The latest measures

Other supportive actions by the authorities

Expanded credit guarantees

Figure 23. The public sector's share in total assets

Increased public lending and restrained interest rates thereon

Figure 24. Loans and discounts of financial institutions

Dealing with problems in the banking system

Table 10. Capital losses in the 1990s

Table 11. Bank failures requiring public funds to cover capital shortfalls, 1998-99

Table 12. Second round of public capital injections into the banking system, March 1999

Figure 25. Reduced credit risk premia in the banking system

Box 1. The international retreat of Japan's banks

Table 13. International lending position of Japanese banks by geographic zone

Table 14. Revenue and expense ratios of major banks

Table 15. The recent evolution of problem loans

Developments in the rest of the banking and insurance sectors

The impact of the measures

Figure 26. Bank lending margins

Table 16. Loans and discounts of domestically licensed banks by interest rate

Table 17. Loans and discounts classified by borrower.

Figure 27. Yield spreads of corporate over government bonds

III. Fiscal policy and medium-term public sector issues

Expansionary fiscal policy and its consequences

Another fiscal package in the context of an increasingly expansionary stance

Table 18. Fiscal measures in the November 1998 package

Table 19. Fiscal packages in the 1990s

Table 20. Central government budget

Table 21. Fiscal Investment and Loan Programme (FILP)

Limited scope for future fiscal stimulus

Table 22. Basic market liquidity measures in five large OECD countries

Table 23. Local public finance programmes (LPFP) and local budgets

Box 2. Unsubsidised investments and local governments

Figure 28. Public works by local governments

Table 24. General government deficits

Figure 29. Net lending: an international comparison

Figure 30. Intra-governmental transfers

Table 25. Balance of social security funds by account

Figure 31. Various definitions of Japan's government debt

Table 26. Detailed balance sheet for general government and public institutions, March 1998

Box 3. Bankruptcies in the third sector

The medium-term fiscal challenge

Table 27. Needed fiscal correction by 2010: an illustration

Public sector reforms

Reform of public administration and institutions

Figure 32. Central government reorganisation

Reform of local government financing

Figure 33. Local and central government shares in receipts and expenditures

Figure 34. Inter-governmental financial transfers to local governments

Figure 35. Regional distribution of costs and benefits of government activities

Figure 36. Effects of the local allocation tax

Progress in decentralisation

Table 28. The number of municipal governments

Public pension reform

Box 4. The pension system in Japan and its recent reforms

Health care reform.

IV. The tax system: a need for comprehensive reform

Figure 37. Total tax revenues

Considerations influencing tax policy

The costs of ageing require significant tax hikes over the next decade

Table 29. Dependency ratios

Box 5. Economic impact of major tax hikes

Table 30. Tax increasing episodes in OECD countries

The starting point is difficult, and reform requires careful timing

Devolution of fiscal autonomy is a high priority reform area

Box 6. Short-term economic impact of tax reform

Table 31. Model simulations of tax reform

Main features of the tax system

Separate income taxation and narrow bases

Figure 38. Highest all-in tax rates for top income earners

Taxes are high on capital and low on consumption

Figure 39. Tax mix in major OECD countries

Box 7. Comparison of tax to GDP ratios

Figure 40. Average effective tax rates

Overall incentives to work, save and invest are not heavily distorted

Figure 41. Average tax wedge for a production worker

Figure 42. Marginal tax wedges on labour income

Box 8. Labour supply elasticities

Table 32. Average implicit tax rates on continued work due to old-age pension systems

Non-neutralities in corporate finance, private savings and the land and property market

Table 33. Marginal effective tax wedges in manufacturing in major OECD countries

Table 34. Dimensions of capital taxation in selected OECD countries

Table 35. Tax treatment of pensions in major OECD countries

Box 9. Reservation price of landholders and the tax system

Table 36. Tax effects on landholders' reservation prices

Figure 43. Effective property tax rates

Tax effects on tenure choice are limited

Table 37. Changes in capital gains tax rates for individuals

Income taxes are almost linear but pre-tax distribution is also even.

Table 38. Redistribution through taxes and transfers

Figure 44. Overall and marginal progressivity in major OECD countries

Figure 45. Actual tax payments by income group

Table 39. Revenue losses due to special tax measures, FY 1999

Tax expenditures are moderately sized

Scope for strengthening the system: increasing revenues, efficiency and equity

Base broadening is required if tax wedges are to be kept low

Figure 46. Comprehensive versus actual tax rates by income group

Box 10. Inefficiency of tax reliefs

The VAT rate should be increased, while income tax rates may be lowered further

Box 11. Earmarking of VAT revenues for social security

Tax treatment of savings - in particular pension savings - should be more equitable

Table 40. Effectiveness of value added taxes

Figure 47. VAT payments based on household surveys

Corporate restructuring in the short and long term could be promoted more strongly

Table 41. Relative disposable income by age of the household head

Box 12. Imputation versus a classical system

Land and property taxation - distortions should be reduced to promote more efficient use of land

Box 13. Increasing the valuation for property taxation

Tax administration - a taxpayers identification number should be introduced

Box 14. Blue and white returns

Table 42. Blue Return diffusion ratios

Local governments: autonomy should be increased and prefectures' tax base made more stable

Table 43. Local tax revenues

Box 15. Italy's new local corporate tax

Strategies for the future

Conclusion and recommendations

Box 16. Options for reform

V. Structural reforms to revitalise the economy

Table 44. Recommendations for further structural reform

Financial sector reform: ongoing liberalisation to enhance competition.

Corporate reform: enhancing flexibility and accountability.

Notes:

Bibliographic Level Mode of Issuance: Monograph

Description based on print version record.

Description based on publisher supplied metadata and other sources.

ISBN:

92-64-16742-0

OCLC:

1132391784