thomas
Feb 22, 2003, 18:18
The G-7 faces dealing with ‘Japan disease’
Topping the list of issues the Group of Seven nations should discuss in Paris this weekend is keeping “Japan Disease” from breaking out around the globe. [...] “Japan Disease” symptoms abound in Hong Kong, for example. Deflation, rising unemployment and waning consumer spending are being met with policy paralysis at the government’s highest levels. Usual tools like fiscal spending and lower borrowing costs have done little. [...] And admittedly, G-7 pressure hasn’t worked with Tokyo. It has long since stopped putting Japan on the spot, not out of tolerance, but resignation. Efforts over the last decade to encourage Japanese policy makers to repair the world’s second-biggest economy accomplished nothing. [...] That’s certainly the cautionary tale offered by Japan. For all the bellyaching about the Bank of Japan not fighting deflation, short-term rates here have been at zero percent, or just about, for years. Even today, easy money policies eliminate incentives for the government to act to repair the banking system, increase competition and reduce public debt levels. Tokyo has showed the world how not to run an economy. For those who don’t learn from those mistakes, “Japan Disease” awaits.
=> http://www.manilatimes.net/national/2003/feb/22/opinion/20030222opi5.html
Topping the list of issues the Group of Seven nations should discuss in Paris this weekend is keeping “Japan Disease” from breaking out around the globe. [...] “Japan Disease” symptoms abound in Hong Kong, for example. Deflation, rising unemployment and waning consumer spending are being met with policy paralysis at the government’s highest levels. Usual tools like fiscal spending and lower borrowing costs have done little. [...] And admittedly, G-7 pressure hasn’t worked with Tokyo. It has long since stopped putting Japan on the spot, not out of tolerance, but resignation. Efforts over the last decade to encourage Japanese policy makers to repair the world’s second-biggest economy accomplished nothing. [...] That’s certainly the cautionary tale offered by Japan. For all the bellyaching about the Bank of Japan not fighting deflation, short-term rates here have been at zero percent, or just about, for years. Even today, easy money policies eliminate incentives for the government to act to repair the banking system, increase competition and reduce public debt levels. Tokyo has showed the world how not to run an economy. For those who don’t learn from those mistakes, “Japan Disease” awaits.
=> http://www.manilatimes.net/national/2003/feb/22/opinion/20030222opi5.html