Wednesday, November 21, 2012

Economic problem in Japan

Japanese economy is suffering from severe depression for several years.
Many economists and even non-professional people are arguing about the reason.

Some people claim that stasis of Japan is due to structural problem. Japan has a lot of legislation restricting companies. So entrepreneurs have to take more risk to change the environment. Innovation hardly occurs. Past Prime Minister Mr. Koizumi made a point of this and he carried out broad relaxation of restriction, so called “reform of structure policy” in 1990s. His leadership made a chance to change the society. But divide between rich people and poor ones was widened.

After that some leaders of Japan rose and fell one after another. In 2009, the Democratic Party of Japan (DPJ) got the majority of the parliament, and started to administer the government instead of long past ruling Liberal Democratic Party (LDP). But Japanese fiscal problem did not improved at all.

Now the next general election is waiting in the next month. Each party is declaring about their own manifest. One of the points of conflicts is economic policy.

The chairman of LDP, Mr. Abe claims that Bank of Japan (BoJ) should make a quantitative relaxation of the money. He intends to reform the Law about administration of BoJ. Mild inflation and justification of deflation caused by appreciation of the yen will rescue financial crisis of Japan, he says.
Present Prime Minister Mr. Noda is opposing it. According to him, if the government invaded the independence of BoJ Japan money would lose trust and hyper-inflation occurs.

I do not know which is right. If I knew, I would earn more money.
Economy is difficult. We have learned many things from past experience. But the future is always clouded.

1 comment:

  1. I am not good at economics either, however, I can understand that the economy, jobs, and unbalance population in each generation (too many elder people and too little younger people!!) are the most important problems.

    Nowadays, Japanese companies tend to go abroad and make product in abroad, and sell this products to abroad, also. For example, Toyota makes their cars in Thailand and sell them to US or Europe, thus there are less Japanese workers in this step, though there are a lot of young jobseekers in Japan....

    Such kinds of trends are quite common in all the Western countries, as you know, IKEA has it industries in all over the world, China, Vietnam, Egypt and so on, and less industries in Sweden, forthermore, they has their main office in Netherland, to avoid high-rate tax in Sweden!!!

    I think their are less solutions about it, however, at least we should avoid to give so much money to make unnecessary buildings in rural areas in Japan, as you know, there are millions of failed examples in the past... I am a bit afraid of it.

    We need some kind of new ideas to re-built rural areas, which have too much elder people and less young people. This must be "something new idea", not buildings.

    Dr Shiina, please plan a nice study to create a new methods to treat elder people! You can sell this method to other countries, thus save Japanese economy! :-)