For a number of reasons japanese demand has stagnated

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: agement policies are nearly impotent, the alternative for the authorities may have to be to wait for an autonomous recovery that will follow from a stock adjustment. This is, in particular, the thesis advanced by Dominic Wilson in his contribution to this issue. For a number of reasons Japanese demand has stagnated or declined in the 1990s and it is highly unlikely that changed price expectations, whether working through lower real interest rates and/or more stable exchange rates, would be sufficient to revive it. The reasons for lower spending propensities lie on the household side with the future stringency of a lower-growth environment, and on the corporate side with the excesses of the ‘bubble’ period. Consumer sentiment has been negatively affected by the increasing gloom of official and private projections on longer-run growth. While in the early 1990s many forecasters still expected medium-term rates of expansion of the order of 3–4 per cent per annum, by the end of the decade these projections had come down to 2 per cent or even less. Combined wit...
View Full Document

This note was uploaded on 02/03/2014 for the course ECON 204 taught by Professor Devero during the Summer '13 term at American University of Sharjah.

Ask a homework question - tutors are online