Takatoshi Ito

The second edition of a comprehensive account of all the major aspects of the Japanese economy, substantially updated and expanded. This textbook offers a comprehensive, rigorous but accessible account of all the major aspects of the Japanese economy, grounding its approach in mainstream economics. The second edition has been extensively revised and substantially updated, with new material that covers Japan's period of economic stagnation between 1991 and 2010. The first edition, published in 1992, focused on Japan as a success story of catch-up economic development; this edition reflects the lessons learned from Japan's Lost Two Decades. After presenting the historical background, the book begins with macroeconomics, studying growth and business cycles. It then covers essential policy issues, with new material that takes into account the Japanese banking crisis of 1997-1998 and the global financial crisis of 2008-2009, discussing financial regulation, monetary policy, and fiscal policy. It goes on to examine saving, demography, and social security in light of Japan's ongoing demographic transition; industrial organization; labor markets; international trade and international finance; and the Japan-U. S. relationship. A new chapter offers a detailed analysis of the Lost Two Decades, synthesizing and applying concepts discussed in previous chapters and offering insights into such issues as successful catch-up growth, demographic shifts, and credit booms and busts.

The yen is now one of the major currencies freely traded in the world, and yet, many Japanese exporters take on a currency risk by invoicing in US dollars. In this book, the authors examine why this is the case, particularly for those exporters who have a strong presence in global markets. Managing Currency Risk enhances our understanding of exporters’ behaviour by analysing the key factors that influence their choice of invoice currency. Detailed research based on unique data sets is used to highlight how firm size, product competitiveness, intra/inter-firm trade and the geography of export destination impact this decision. This book is a valuable resource for international finance researchers and political economists wishing to discover up-to-date information regarding currency invoicing by multinational firms. It will also be a vital tool for financial and governmental practitioners to discover more about their competitors’ behaviour.

For more than three decades, the United States has conducted a unique Japan-specific economic policy. This policy was motivated by Japan's economic size and dynamism, fears that a unique "Japanese model of capitalism" enabled it to compete unfairly and threaten American prosperity during a period of prolonged US economic difficulties, and that the United States had unique capabilities to induce policy change in Japan due to its provision of security guarantees. No More Bashing argues that these assessments are mistaken and that the United States should abandon its Japan-specific policy. Japan's declining relative importance in the world economy, the waning distinctiveness of its economic institutions, the failure of most recent US initiatives toward Japan, and the emergence of strengthened international institutions such as the World Trade Organization, all underscore the advisability of formulating new approaches to bilateral relations rooted more firmly in multilateral institutions. This volume analyzes the outlook for the Japanese and US economies; their trade and financial relationships, including their trade negotiations over the past decade; the implications of new regional developments, most notably the rise of China and proposals for East Asian economic cooperation; and the roles of the United States and Japan in the provision of international public goods such as development assistance, environmental protection, and international security. It emphasizes that their trade agenda is increasingly moving beyond traditional border impediments toward the more politically sensitive issues of internal regulation and deregulation, such as competition policy. The authors propose a series of new initiatives to address these challenges and strengthen the multilateral system.

This book analyzes how the bank-dominated financial system-a key element of the oft-heralded "Japanese economic model"-broke down in the 1990s and spawned sweeping reforms. Japan's financial institutions and policy underwent remarkable change in the past decade. The country began the 1990s with a heavily regulated financial system managed by an unchallenged Ministry of Finance and ended the decade with a Big Bang financial market reform, a complete restructuring of its regulatory financial institutions, and an independent central bank. These reforms have taken place amid recession and rising unemployment, collapsing asset prices, a looming banking crisis, and the lowest interest rates in the industrial world. This book analyzes how the bank-dominated financial system-a key element of the oft-heralded "Japanese economic model"-broke down in the 1990s and spawned sweeping reforms. It documents the sources of the Japanese economic stagnation of the 1990s, the causes of the financial crisis, the slow and initially limited policy response to banking problems, and the reform program that followed. It also evaluates the new financial structure and reforms at the Bank of Japan in light of the challenges facing the Japanese economy. These challenges range from conducting monetary policy in a zero-interest rate environment characterized by a "liquidity trap" to managing consolidation in the Japanese banking sector against the backdrop of increasing international competition.

In this capstone volume in the INE series, the authors review the growing pressure for deeper international integration, explore the strengths and weaknesses of alternative approaches to dealing with these pressures, and present concrete proposals to help achieve a global community that will balance openness, diversity, and cohesion. A volume of Brookings' Integrating National Economies Series