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In RealTime posts, PIIE senior staff and colleagues discuss the fast-moving economic news, financial developments, and public policy choices confronting the United States and the world.
Prime Minister Shinzo Abe’s announcement on March 15 that Japan will seek membership in the Trans-Pacific Partnership (TPP) brings the negotiations a step closer to a large, 12-member trade agreement connecting countries that account for 38 percent of world GDP. To be sure, much work lies ahead before Japan fully participates: bilateral discussions with TPP [...]
While in Korea and Japan several weeks ago, sparks flared not only over the Senkakus/Diaoyu/Diaoyutai Islands and Dokdo/Takeshima but the highly emotional issue of comfort women. As a result, we are about to have one of those quasi-natural experiments that social scientists love. Will history and politics trump economics? Or will growing interdependence pull the [...]
The mid-November meeting of the Asia Pacific Economic Cooperation (APEC) forum produced some welcome news for the Trans-Pacific Partnership (TPP), a potential agreement that could clear the way for more trade and investment across the Pacific. Most important, three countries—Canada, Japan, and Mexico—announced that they would explore the possibility of joining the negotiations, which already [...]
Today the Japanese Diet passed a 4 trillion yen supplementary budget to support earthquake and tsunami reconstruction. The amount is roughly one-sixth of the baseline estimate of 25 trillion yen (around 5 percent of GDP) over 3 years. The extraordinary thing about the “supplementary” budget is that it is being advertised as entirely financed by [...]
Last month, in a Washington Post outlook piece, I argued that if handled adroitly, the triple crisis facing Japan could be used to modernize the country’s politics. The government’s response to the disaster has been anything but adroit, and the opportunity to use the crisis to propel the nation forward is slipping away. In the [...]
As disaster relief operations proceed in Japan, ongoing problems in power generation are expected to extend into the fall, if not beyond. Japan is facing as much as a 15 gigawatt (GW) electricity shortage when demand ramps up in the summer. Supply may be increased by 5GW primarily by bringing power generating plants currently under [...]
On Sunday the Tokyo Electric Power Company announced that they had found puddles at the damaged Fukushima nuclear facility’s No. 2 reactor containing extraordinarily high levels of radioactivity—10 million times higher than would be found in water in a normally functioning nuclear reactor. Thirty minutes later they retracted the statement. Thankfully the markets were closed [...]
The government of Japan has announced a preliminary estimate of earthquake damage recovery costs of 25 trillion yen ($309 billion) over three years, or about 5 percent of current GDP, double the Kobe quake and nearly four times more than Hurricane Katrina. This estimate follows on the heels of a somewhat lower estimates collected by [...]
While Japan appears to be making progress in resolving the situation at the damaged Fukushima nuclear power facility, the idiosyncrasy of the Japanese power grid and the nuclear industry’s checkered history could contribute to further undermining the struggling government’s already shaky credibility. In the words of one young Japanese woman acquaintance, "I don’t trust them [...]
The earthquake and tsunami that devastated the Tohoku region of northern Japan took place against a challenging economic backdrop for Japan. Before tragedy struck, the country was already facing a slowing economy, fiscal strain, and deflation. The costs of this disaster are still being counted, and the nuclear power plants represent a wildcard. Yet rebuilding [...]