Will the Japanese government take the decisive but manageable policy actions needed to bring about economic recovery? Despite claims to the contrary, macroeconomic expansion has yet to be seriously tried in Japan. Criticism of current Japanese macroeconomic and financial policies is so widespread that the reasons for it are assumed to be self-evident. In this volume, Adam Posen explains in depth why a shift in Japanese fiscal and monetary policies, as well as financial reform, would be in Japan's own self-interest. He demonstrates that Japanese economic stagnation in the 1990s is the result of mistaken fiscal austerity and financial laissez-faire rather than any supposed structural failures of the "Japan Model." The author outlines a program for putting the country back on the path to solid economic growth—primarily through permanent tax cuts and monetary stabilization—and draws broader lessons to be learned from the recent Japanese policy actions that led to the country's continuing stagnation. The book will be a useful supplementary text for both undergraduate and postgraduate courses in macroeconomics, comparative political economy, Japan or East Asian studies, public finance, and international relations.
(Posen) offers a trenchant examination of Japanese fiscal policy during the 1990s ... He persuasively debunks the argument that fiscal stimulus cannot work in Japan ...
Richard N. Cooper, Foreign Affairs
An excellent book.
Martin Wolf, The Financial Times
Japan's persistent stagnation is among the most important problems confronting the world economy today, and Adam Posen's treatment of it is the best I have seen. His analysis is right on the mark...
Benjamin Friedman and William Joseph Maier, Harvard University
Its analysis is convincing, and its policy recommendations are ... sensible. I strongly recommend it to economists and policymakers alike. I ... hope that Japanese policymakers have the wisdom to heed his advice.
Charles Yuji Horioka, Osaka University and National Bureau of Economic Research
All in all, Mr. Posen recommends an excellent program for 1998. And his ideas mostly still remain an excellent program for 2001.
Robert H. Aten, Society for Government Economists Bulletin