http://www.aljazeera.com/news/asia-pacific/2013/01/201311133759477326.html
Japan's newly elected government approved and finalized the 24 billion dollar package on Friday. the new approach to Japan's economic down turn is aimed at reviving the economy, reconstructing and boosting jobs in the coastal areas which were devastated after the march 2011 tsunami, and increasing its military spending in order to beef up monitoring and defense as china is seen more and more as a threat with its rise to power. The plan is seen as an aggressive move to help recover Japan's economy which is in downturn. Japan's central government has been put under pressure by te new Prime minister to do "whatever it takes to meet an inflation target of two percent to counter a persisting cycle of sinking prices and weak demand."
Being possibly the third largest economy, Japan is vital to all of our economies. If their economy gets better, then our economy can possibly improve. It is good to see the Japanese government taking action. The only problem there might be is getting the money they spend on the stimulus package back, so they don't run the risk of being more in debt.
ReplyDeleteI agree with Mike's comment. It is good to see that one of the worlds biggest economies is getting better and hopefully improving in the near future. Any country we do business with will have some sort of effect on our own economy. Anytime a fellow trade partners economy grows is not only good for them, but good for us as well.
DeleteI agree with the previous comment , Japan is a fast growing economy and this stimulus plan would help in creating employment opportunities and also help the economy come back on track after the recession.
ReplyDeleteTheir debt-to-GDP ratio already exceeds 200%. I think that is a little extensive. It sounds really good all the action Shinzo Abe is taking, and especially the inflation target. However, I think he is interfering a lot and he should let BoJ (bank of Japan) continue do what they're doing. I am an advocate of increasing money supply through printing more money - also make Japan's exports more attractive.
ReplyDeleteSince I consider myself a fiscal conservative, I think Japan needs to increase its taxes and avoid all the deficit spending.
Increasing the money supply of the economy and attempting to stimulate aggregate demand during a recession is certainly an appropriate policy decision and is suitably countercyclical. However, it is debatable whether the government stimulus is better, in this case, than allowing the central bank to react with monetary policy.
ReplyDeleteHopefully, the stimulus package will work out for the better, and Japan's debt will not become crippling. An improvement in Japan's economy would certainly be good for its trade partners as well as Japan.