The paper "The Japanese Economy" is a perfect example of a macro and microeconomic case study. Japan’ s economy has been known to be among the stable economies around the globe for many years. It has been the second-biggest economies after the US’ s economy. Recently, it has been overtaken by China and now it is the third-biggest economy. Its stableness is attributed to the culture of high technology, innovation and democracy; most of the high-tech tools and equipment around the world originate from Japan. Japan for a long time has been considered to be an important partner to the US in Asia (Whalen, 20-14, pp1).
The US has largely depended on Japan on strategizing business matters in the Asian continent. Important figures in both Japan and the US have claimed that Japan upholds the balance of power in Asia and it will remain to be dominant democracy in Asia for a long time. All this reputation emanates from innovation and collaboration with the US as the largest economy around the world. This paper focuses on Japan’ s economy. It shows how the bank of Japan tried to manipulate macro-elements to stabilize its economy. It discusses the quantitative easing monetary policy as the main approach that BOJ adopted to curb the collapsing economy. Japan’ s state of the economy Critics argue that Japan can better be called the land of the setting sun.
This means that its economic prowess is fading. They assert that the assumption and thinking that Japan’ s economy is stable is just a misconception since the facts from the past few decades prove that its economy is underperforming and this is why it has been surpassed by China (Whalen, 20-14, pp1). Most economists have measured Japan’ s public finance and they have realized that Japan has the worst public finance all over the world.
They point out that Japan’ s total public debt is approximately 200% of the Gross national product (GDP). The public debt was only about 50% in 1980, after two decades, it moved from 50 to 200% (Westra, 2012, pp702). ).The forecasts reveal that the public debt would still increase in the future if necessary measures are not taken. Just for comparison purposes, the US public debt is about 100%, Italy, 160%, Germany 80% and Greece 180% (Whalen, 20-14, pp1). This means that Japan has an unusual public debt.
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