Five Reasons Not to Fear Deflation: Which Ones Make Sense?

In a post earlier this week, I explained why a majority of economists fear deflation. They argue that deflation disrupts the operation of financial markets and labor markets in a way that risks touching off a downward spiral. At the same time, they say, deflation weakens the power of monetary policy to reverse the downward […]

Japan’s Pivot to India

India’s newly elected prime minister, Narendra Modi, made his first geostrategic move in Asia’s complex new dynamics this week, and together with Prime Minister Abe, catapulted the Japan-India relationship into a “special strategic and global partnership.”  Two goals focused their attention: bolstering their national economies and contending with China’s growing influence. While their ambitions for their partnership may […]

Structural Reforms Can Help Japan’s Post-Consumption Tax Blues

By Stephan Danninger: Japan’s GDP declined by almost 7 percent in the second quarter, more than many had forecast including us here at the IMF.  Many cite the increase in the sales tax this April for this decline.  But that is not the full story. Yes, it is true that consumer responses to major tax increases are difficult […]

Japan Finally Gets Tough On Russia

By Amy Gleich: Last week in Tokyo, during a meeting of Prime Minister Shinzo Abe’s cabinet, Japan chose to impose harsher sanctions on Russia. The decision took effect immediately after the meeting on August 5. The sanctions focus on 40 individuals and two companies. A statement from the Japanese government outlined the scope of the sanctions, saying “assets held […]

More Bad News for Fukushima and Tepco

By Andy Tully: Tokyo Electric Power Co. (Tepco) now says the meltdown of the Fukushima No. 1 nuclear power plant in March 2011 involved all the fuel rods in the affected reactor, causing them to fall to the bottom of the containment vessel. Eight months after the massive tsunami caused the accident, Tepco said the […]

Can Japan Afford to Cut Its Corporate Tax?

By Ruud de Mooij and Ikuo Saito: (Versions in 日本語) It is no surprise that, as part of its revised growth strategy presented in June, the Japanese government has announced it will reduce the corporate income tax rate. At more than 35 percent for most businesses, the Japanese rate is one of the highest among the industrialized countries of […]

Can Abe Build Support for Security Reforms?

Even as regional challenges to Japan’s security have intensified, the domestic debate over security reforms continues to reveal deep divisions in Japan. Since coming into office a year and a half ago, the Shinzo Abe cabinet has sought an overhaul of its security policy, including a revision of the U.S.-Japan Defense Cooperation guidelines that shape alliance military […]

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