2004 Reports

Solutions to Japanese Economic Problems

Japan's decade of economic underperformance and malaise appears to be coming to an end. The economy is experiencing its third round of recovery, this time without the marked use of fiscal stimuli. Is this, in fact, a "genuine recovery?" Does the Japanese public, as well as the business sector, perceive the recovery as real? Has structural reform addressed the problems confronting Japan sufficiently for a real recovery to continue? What problems persist even if recovery proceeds? What policy prescriptions are being utilized by Japanese policymakers and business leaders? Are they appropriate? What is being overlooked? Are we operating under any misconceptions regarding current and future economic conditions and trends? What lessons can be learned from the experiences of other advanced economies? This symposium endeavors to answer these questions, tackling two major themes: Japan's macroeconomic policy issues, including both monetary policy and the long-run fiscal sustainability of the Japanese budget; and the reform of Japan's banking system and government financial institutions. On June 21, 2004, the Center on Japanese Economy and Business of Columbia University and the Research Center for Advanced Science and Technology of the University of Tokyo sponsored a symposium focusing on the theoretical approaches of macroeconomics to Japan's recession at Roppongi Academy Hills Auditorium in Tokyo, Japan. The symposium brought together academics, business leaders, and public officials from both the United States and Japan in order to ensure a comprehensive approach to the resolution of the problems confronting the Japanese economy today. This report represents excerpts of the symposium, accompanied by highlights of exchanges with the audience that day.