Financial Crisis and Long-term Stagnation in Japan: Fiscal Consolidation under Deflationary Pressures
The Japanese economy faces a number of difficult economic problems to solve; declining working-age population, long-term deflation, monetary policy with zero-interest rate floor, and a large budget deficit. In this paper, we propose a few macro-economic measures to raise taxes without hurting the economic recovery. Specifically, gradual increases in indirect taxes with reductions in payroll tax and corporate income tax will be most effective in improving the Japanese fiscal situations.
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- Mitsuhiro Fukao, 2006.
"Financial Strains and the Zero Lower Bound: The Japanese Experience,"
NBER Chapters,in: Monetary Policy with Very Low Inflation in the Pacific Rim, NBER-EASE, Volume 15, pages 203-232
National Bureau of Economic Research, Inc.
- Mitsuhiro Fukao, 2003. "Financial strains and the zero lower bound: the Japanese experience," BIS Working Papers 141, Bank for International Settlements.