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Economic Stagnation in Japan

Exploring the Causes and Remedies of Japanization Edited by Dongchul Cho, Member of the Monetary Policy Board, The Bank of Korea and former Chief Economist, Korea Development Institute, Takatoshi Ito, Columbia University, US and Andrew Mason, Professor of Economics, University of Hawaii at Manoa and Senior Fellow, Population and Health Studies, East-West Center, Hawaii, US
Japan’s dramatic transformation from economic success to economic stagnation offers important policy lessons to advanced countries everywhere that are struggling with stagnation. The term ‘Japanization’ is often used by economists to describe long-term stagnation and deflation. Symptoms include high unemployment, weak economic activity, interest rates near zero, quantitative easing, and population aging. In the global context, what can governments do to mitigate the downward trends experienced by Japan? This judicious volume investigates in depth the causes of Japan’s ‘lost decades’ versus the real recovery achieved by the United States, and the lessons that can be learned.
Extent: c 320 pp
Hardback Price: $150.00 Web: $135.00
Publication Date: January 2018
ISBN: 978 1 78811 043 3
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  • Asian Studies
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Japan’s dramatic transformation from economic success to economic stagnation offers important policy lessons to advanced countries everywhere that are struggling with stagnation. The term ‘Japanization’ is often used by economists to describe long-term stagnation and deflation. Symptoms include high unemployment, weak economic activity, interest rates near zero, quantitative easing, and population aging. In the global context, what can governments do to mitigate the downward trends experienced by Japan? This judicious volume investigates in depth the causes of Japan’s ‘lost decades’ versus the real recovery achieved by the United States, and the lessons that can be learned.

This book helps to provide a basis for assessing a wide range of policy approaches from which policymakers and governments can choose to avoid economic decline. The expert contributions provide an overview of the pattern of ‘Japanization’ in a global economic perspective, analyze similarities and differences between the Korean and Japanese economies, and examine policy measures taken by Japan during the lost decades. From this analysis, the book proposes future policy solutions for countries experiencing ‘Japanization’.

Economic stagnation and the relevant policy reactions have been of keen interest around the globe since the global financial crisis and this book will be an invaluable resource for scholars, policymakers, and economic commentators alike.
Contributors include: D. Cho, M. Fukao, K. Ito, T. Ito, D. Jeong, K.-C. Jung, S.T. Kim, Y.G. Kim, K. Kwon, A. Mason, J. Oh, I. Saito, J. Schiff, I. Song

Contents:

Preface

1. Introduction and overview
Dongchul Cho, Takatoshi Ito and Andrew Mason

PART I  AGING, INDUSTRY MATURATION AND JAPANIZATION
2. Japanization: Is it spreading to the rest of the world?
Takatoshi Ito

3. GDP growth from the perspective of demographic change: Will aging Korea become another Japan?
Kyooho Kwon

4. Export dynamics of Japan, Korea and China
Kyu-Chul Jung

PART II  RESOURCE ALLOCATIONS AND TFP
5. Product market efficiencies and TFP: A comparative study of Japanese and Korean firms
Keiko Ito and YoungGak Kim

6. Misallocation in the manufacturing sector of Korea: A micro data analysis
Jiyoon Oh

PART III  ROLES OF FINANCIAL MARKETS
7. Financial market efficiency: A comparative perspective
Mitsuhiro Fukao

8. How to deal with the rise of zombie firms in Korea
Daehee Jeong

PART IV  MONETARY POLICY AND HOUSE PRICES
9. Deflation and monetary policy
Barry Eichengreen

10. Is Korea’s monetary policy following in the footsteps of Japan?
Dongchul Cho

11. Aging and housing prices: The cases of Korea and Japan
Inho Song

PART V  JAPANIZATION AND FISCAL POLICY
12. Avoiding another “lost decade”: What role for fiscal policy?
Jerry Schiff and Ikuo Saito

13. Lessons for Korea from Japan’s fiscal policy
SeongTae Kim

Index