1/8
Interesting interview of Japan's Saito Renho, a former president of the Democratic Party of Japan. I couldn't help but read within a Chinese context her comments about Japan's failed attempts to resolve demand-side imbalances with supply-side measures.
hks.harvard.edu/centers/mrcbg/…
Interesting interview of Japan's Saito Renho, a former president of the Democratic Party of Japan. I couldn't help but read within a Chinese context her comments about Japan's failed attempts to resolve demand-side imbalances with supply-side measures.
hks.harvard.edu/centers/mrcbg/…
2/8
She starts by pointing out that "the idea of Abenomics was to improve the economy by a trickle-down effect, by enriching the 'haves' within society, the richer and the large corporations."
She starts by pointing out that "the idea of Abenomics was to improve the economy by a trickle-down effect, by enriching the 'haves' within society, the richer and the large corporations."
3/8
She continues: "The improvement for the rich would then improve labor conditions throughout society and raise the economic growth of Japan as a whole."
This is the classic supply-side approach.
She continues: "The improvement for the rich would then improve labor conditions throughout society and raise the economic growth of Japan as a whole."
This is the classic supply-side approach.
4/8
But rather than boost domestic demand, it boosted savings: "However, this did not lead to any kind of increase in the wages for workers, and it led to greater revenues just turning into large corporations’ capital as retained earnings."
But rather than boost domestic demand, it boosted savings: "However, this did not lead to any kind of increase in the wages for workers, and it led to greater revenues just turning into large corporations’ capital as retained earnings."
5/8
These policies could have worked a few decades earlier, when the Japanese economy was investment-constrained: "If Abenomics policies were implemented during the Showa period when there was rapid economic growth, we might have seen a different result."
These policies could have worked a few decades earlier, when the Japanese economy was investment-constrained: "If Abenomics policies were implemented during the Showa period when there was rapid economic growth, we might have seen a different result."
6/8
She now recognizes that policies that force rebalancing are key to getting Japan to grow again: "For us, we believe that rather than having this [redistribution] rely on economic growth, in order to bridge and shrink the wealth disparities within society which have...
She now recognizes that policies that force rebalancing are key to getting Japan to grow again: "For us, we believe that rather than having this [redistribution] rely on economic growth, in order to bridge and shrink the wealth disparities within society which have...
7/8
widened during Abenomics, we should start by redistributing to the most-needed, ensuring that those who are not wealthy can have a better situation. This can stimulate consumption, for which we need to have these structural changes."
widened during Abenomics, we should start by redistributing to the most-needed, ensuring that those who are not wealthy can have a better situation. This can stimulate consumption, for which we need to have these structural changes."
8/8
The constraints, she says, are political and institutional: "I think there were political impediments in that, for a long time, we were just seeing the chasing of past policies and trying to follow up on things which had been done in the past."
The constraints, she says, are political and institutional: "I think there were political impediments in that, for a long time, we were just seeing the chasing of past policies and trying to follow up on things which had been done in the past."
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