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  • Does Japan Vindicate Modern Monetary Theory?

    From project-syndicate.org

    Public debt has soared since the 2008 financial crisis, and especially during the COVID-19 pandemic. According to the International Monetary Fund, the ratio of public debt to GDP in advanced economies increased from around 70% in 2007 to 124% in 2020. But the fear that rising public debt will fuel future financial crises has been subdued, partly because government bond yields have been so low for so long. Although yields started falling much earlier, in the 1990s, they were kept low by quantitative easing (QE) after the 2008 and 2020 recessions. Few doubt that massive fiscal expenditures were warranted to alleviate ... (full story)

This is a poor description of the issues in Japan. Consequently the question is a nonsense. Briefly Japan is not a market economy as you might find described in any basic textbook. Markets in Japan are subject to extensive and intensive Government intervention as though it is OK to pretend that intervention is minimal. Developed economies often deviate from a free market model because when you are powerful it seems better to pretend that the model does not apply to you only to other countries. This is the game. In the end the game helps you or it does not. This is the point of the question.
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  • Posted: Dec 23, 2021 12:40am
  • Submitted by:
     Newsstand
    Category: Fundamental Analysis
    Comments: 1  /  Views: 764
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