| Abstract: | For a decade now Japan has virtually stagnated. Some blame thison a succession of unfavourable shocks that began with the burstingof the 'bubble' economy. More appropriate macroeconomic policies,targeting inflation and/or the exchange rate, could, in thisview, lead to a revival. Others argue that the country's problemsare deeper seated and require major structural reforms. Manyaspects of Japan's distinctive economic system should, in thisview, be either jettisoned or profoundly changed. It is unlikelythat demand-management policies can add much to what they havedone so far. Deregulation is needed in many areas and would,no doubt, help, but a wholesale rejection of erstwhile institutionsand practices does not seem on the cards and might well be disruptive. |
