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Unformatted text preview: ir article on the financial
system), etc., could all contribute to shortening the
inevitable period of adjustment. In addition, by raising the likely growth of potential output, they might
also help in at least partially dispelling the population’s fears about its longer-run economic future.
These are the issues addressed in the next section. IV. SHOULD THE ‘JAPANESE
MODEL’ BE CHANGED?
The picture painted so far is of an economy which
has gone through a decade of slow growth and
which, unless one takes the most optimistic view of
its long-run potential, will only recover if productivity
can be increased. Modern technology and the ‘New
Economy’ may, of course, help in this. It is likely,
however, that institutional change could also contribute and may be essential. Estimates made by the
OECD and by the EPA suggest that completion of
the various reforms that have been promoted in
recent years could boost the level of Japanese
output by as much as 6–10 percent of GDP in the
long run (OECD, 1...
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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.
- Summer '13