Wall Street Journal (January 10)
“Based on the growth of the money supply, Japan clearly fails to qualify as ultra-loose. On the contrary, it has been ultra-tight for decades.” Based on the quantity theory of money and Milton Friedman’s insights, “that tightness put Japan right where anyone… would expect: with ultra-low inflation.” That’s right, “Japan’s ultra-low inflation rates have been the result of ultra-tight, not ‘ultra-loose,’ monetary policy. The Bank of Japan’s attraction to this fallacy has resulted in Japan’s lost decades.”
Tags: BOJ, Fallacy, Friedman, Growth, Japan, Lost decades, Monetary policy, Money supply, Rates, Ultra-loose, Ultra-low inflation, Ultra-tight
New York Times (January 8, 2012)
Americans are warned that their country could follow Japan and face lost decades. This is a myth. Japan is not a fallen giant. Indeed it has quietly been strengthening its competitiveness. “Japan should be held up as a model, not an admonition. If a nation can summon the will to pull together, it can turn even the most unpromising circumstances to advantage. Here Japan’s constant upgrading of its infrastructure is surely an inspiration. It is a strategy that often requires cooperation across a wide political front.”
Tags: Cooperation, Infrastructure, Japan, Lost decades, U.S.
The Economist (November 19)The Economist (November 19)
Japan’s lost decades are not so bad when seen in light of a decreasing population. “In aggregate, Japan’s economy grew at half the pace of America’s between 2001 and 2010. Yet if judged by growth in GDP per person over the same period, then Japan has outperformed America and the euro zone.”
Japan’s lost decades are not so bad when seen in light of a decreasing population. “In aggregate, Japan’s economy grew at half the pace of America’s between 2001 and 2010. Yet if judged by growth in GDP per person over the same period, then Japan has outperformed America and the euro zone.”
Tags: GDP, Growth, Japan, Lost decades, Population, U.S.
Financial Times (September 6)
The U.S. is not “going the way of Japan,” according to Paul Sheard global chief economist at Nomura. There are similarities, both nations had massive asset bubbles, but “a series of policy errors” led to Japan’s lost decades. “Inflation and deflation are, at the end of the day, policy choices. US policymakers, by and large, have learnt the lessons from the policy mistakes of Japan and have applied them, so far reasonably successfully.”
Economist (March 17)
“Some natural disasters change history. Japan’s tsunami could be one.” After two lost decades, Japan desperately needs change. “This dreadful moment” may eventually prove more than “a time of death, grief and mourning.” It may also be “a time of rebirth.”
Tags: Japan, Lost decades, Natural disaster, Tsunami
