"(...) I have been following the events in Japan
with great interest. This is partly
out of the desire to understand how a large, modern economy can be moribund for
23 years and counting. But I’m also interested because the policies that Japan
has utilized for so long are now being emulated by many countries around the world.
Japanese policy is the avant-garde of economics — or, perhaps, the canary
in the coal mine. And since the financial crisis of 2008, the United States and
Europe are following a very similar path. Of course, every country has
unique characteristics and is comprised of its own social customs, values,
demographics, and history. However, the approach these countries are
using — and which Japan is using with gusto — can generally be traced back
to the same philosophical source: John Maynard Keynes. Moreover, because Japan
has been using these policies and approaches for so long — and because it
has a very insular culture — we have a rich laboratory with which to make
observations about the efficacy of monetary policy, fiscal stimulus, debt
issuance, monetization of debt, and so forth."
