Book contents
- The Political Economy of the Abe Government and Abenomics Reforms
- The Political Economy of the Abe Government and Abenomics Reforms
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Contributors
- Acknowledgments
- Abbreviations
- Part I Introduction
- Part II Political Context
- Part III Macroeconomic Policy
- 6 Abenomics, Monetary Policy, and Consumption
- 7 The Great Disconnect
- 8 Abenomics, the Exchange Rate, and Markup Dynamics in Japanese Industries
- 9 The Crisis That Wasn’t
- Part IV Third Arrow of Abenomics
- Part V Foreign Policy
- Index
- References
9 - The Crisis That Wasn’t
How Japan Has Avoided a Bond Market Panic
from Part III - Macroeconomic Policy
Published online by Cambridge University Press: 05 February 2021
Book contents
- The Political Economy of the Abe Government and Abenomics Reforms
- The Political Economy of the Abe Government and Abenomics Reforms
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Contributors
- Acknowledgments
- Abbreviations
- Part I Introduction
- Part II Political Context
- Part III Macroeconomic Policy
- 6 Abenomics, Monetary Policy, and Consumption
- 7 The Great Disconnect
- 8 Abenomics, the Exchange Rate, and Markup Dynamics in Japanese Industries
- 9 The Crisis That Wasn’t
- Part IV Third Arrow of Abenomics
- Part V Foreign Policy
- Index
- References
Summary
This chapter explores the history of Japanese fiscal policy over the past two decades with the aim of better understanding where previous forecasts have erred. Japan provides an important case study of how a country facing intense fiscal pressures can avoid a hyperinflation or financial panic. We find that there were three key forces that likely improved Japan’s fiscal situation relative to more pessimistic predictions. First, the Japanese government has shown remarkable ability to hold down per capita expenditures on social pensions and healthcare. Second, the Japanese government has been able to raise taxes substantially. Third, the remarkable monetary policy pursued by the Bank of Japan has resulted in a dramatic decline in the amount of government bonds held by the private sector.
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- Publisher: Cambridge University PressPrint publication year: 2021
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