Description

For over two decades now, Japan has found itself at the forefront of economic policymaking. The bursting of the bubble economy ushered in an era of zero interest rates and unconventional monetary policy, long before such measures were widely adopted elsewhere during the Global Financial Crisis. Japan’s demographic trends presage continental Europe’s future. Many policy choices have been copied, even though their effectiveness continues to be debated in Japan as abroad. This event brought together leading members of the policy community from Japan and North America to discuss Japan’s experience. The purpose was not to take stock of Japan’s (alleged or real) malaise, but to identify common themes that provide useful lessons for other countries.

Innovation and Economic Growth in Japan: Firm-Level Approach  by Nobuyuki Kinoshita.  Slowdown in TFP and capital stock accumulation are the two main causes of Japan’s long-term economic stagnation. I analyzed this problem on the firm-level approach. Nowadays ICT innovation has changed our way of lives everywhere in the world. Under this circumstance, Japanese firms do invest in ICT and R&D too, but something is weighting down on TFP growth. Actually, they stick to their own R&D and collaborate less with other organizations. Besides, entry of innovative entrepreneurs and exit of unproductive firms are remarkably weak in Japan. As a result, Japanese firms all in all get older and less active. My presentation gave the policy implication that the Japan’s enterprise system should be reformed and that the speed up of the industries restructuring is particularly critical.   

Nobuyuki KINOSHITA (Senior Advisor, AFLAC Insurance Japan, Tokyo), formerly with the Ministry of Finance and then the Bank of Japan, is an expert on corporate governance reforms in Japan and their macroeconomic implications. He served as Executive Director at the Bank of Japan from 2010 to 2014. He is currently senior advisor to Aflac (Columbus, GA), a leading supplemental insurance provider in the US and Japanese markets. He regularly presents to academic and professional audience on Japanese macroeconomic policies.  

Aging in Japan: A Fiscal and Macroeconomic Conundrum by R. Anton Braun.  Japan is in the midst of a demographic transition that is both rapid and large by international standards. Aging is already placing a burden on government finances. Public expenditures on pensions, medical care and long-term care are rising.  At the same time, low fertility rates in conjunction with longer life expectancies are increasing the old-age-dependency ratio and workers are facing higher tax burdens.  Moreover, Japan’s ability to confront the negative fiscal implications of future aging is constrained by its very high debt-GDP ratio. In my presentation I detailed the size of the fiscal imbalances created by aging, explained how Japan’s fiscal situation is creating a drag on macroeconomic activity and discussed the efficacy of alternative strategies for stabilizing the fiscal situation and boosting economic growth.  

R. Anton Braun is a research economist and senior adviser at the Federal Reserve Bank of Atlanta and a visiting professor of economics at Keio University. His research topics include fiscal and monetary policy and aging. Before joining the Bank in 2010 he was a professor of economics at the University of Tokyo where he taught from 2001-2010.  Symposium chaired by Mark Manger  Mark Manger (Munk School of Global Affairs, University of Toronto). Professor Manger is an Associate Professor of Political Economy and Global Affairs at the Munk School and the Department of Political Science.  He received his doctorate from UBC and joined the Munk School in 2012 following tenure-track appointments at McGill University and the London School of Economics.  Professor Manger’s field of specialization is international political economy, with emphasis on trade and finance, and the political economy of East Asia and Japan. He has been a visiting researcher at the Institute of Social Science, University of Tokyo, in 2003 and in 2010, and is an alumnus of the Program on US-Japan Relations at Harvard University, where he was a fellow in 2007-2008.