Learning from Japan’s Crises: Then and Now
Fed Japan Panel Discussion
The Japan Table at the Federal Reserve Bank of New York on March 26 hosted an informal panel discussion on the Japanese economy, focusing on macroeconomic and monetary policy in Japan, and lessons for the United States.
The presentations considered Japanese policies both in the 1990s and currently, in light of the deepening recession. The panelists in order of appearance were Richard Katz, editor of The Oriental Economist; David Weinstein, Shoup Professor of the Japanese Economy and Associate Director for Research of the Center on Japanese Economy and Business at Columbia University; Nami Numoto, Deputy General Manager of the Chief Representative Office for the Americas, Bank of Japan; Hugh Patrick, Director of the Center on Japanese Economy and Business, Columbia University; and Alicia Ogawa, Adjunct Professor at the School of International and Public Affairs and Senior Advisor to the Center on Japanese Economy and Business, Columbia University.
One key point of David Weinstein’s slides is that U.S. monetary policymakers responded to the beginning of the decline (measured by the Japanese December 1989 stock market peak and to the U.S. October 2007 stock market peak) in months while it took the Japanese policymakers years; the U.S. response so far has been five times more rapid. Rick Katz’s presentation was based on his March 19th presentation to Congress; more information is available here.
A major part of Hugh Patrick’s presentation is that Japan’s domestic demand gap today is huge and that major fiscal stimulus is necessary; he notes that the very comparative Japanese policymaker mindset on fiscal stimulus now seems to be changing.
One main theme of Alicia Ogawa’s presentation (to be posted soon) is that Japan’s banking system is once again having serious difficulties and they are unlikely to be resolved soon.
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