Lessons from Decades Lost: Economic Challenges and Opportunities Facing Japan and the United States

Prime Minister Shinzo Abe's economic policies—dubbed Abenomics—have been successful on some but not all fronts. The Japanese government must still pursue policies to increase economic growth. This PIIE Briefing, released on the heels of Prime Minister Abe's election victory in December, calls on Japan, for example, to be flexible in the negotiations for a Trans-Pacific Partnership (TPP) trade deal and to take steps to achieve fiscal sustainability over the medium and long term. The papers in this volume were presented at the first seminar of the High-Level Working Group on Japan-US Common Economic Challenges on June 3, 2014, and it includes an assessment of Abenomics by PIIE president Adam S. Posen. The initiative, launched by the Peterson Institute for International Economics, the Sasakawa Peace Foundation USA, and the Sasakawa Peace Foundation, brings together distinguished economists and former government officials from both countries, providing a forum to illuminate important US-Japan issues and produce policy advice and research ideas. The second session of this Working Group was held on December 18–19, 2014 in Tokyo.

Contents

Preface

1 An American's Assessment of Abenomics at Mid-Term
Adam S. Posen
Data disclosure: The data underlying this analysis are available here [xlsx].

2 Japan's Lost Decades: Structural Causes and Lessons
Kyoji Fukao
Data disclosure: The data underlying this analysis are available here [xlsx].

3 Sustainability of Public Debt in the United States and Japan
William R. Cline
Data disclosure: The data underlying this analysis are available here [xlsx].

4 Comparing Fiscal Problems in Japan and the United States
Tokuo Iwaisako
Data disclosure: The data underlying this analysis are available here [zip].

5 The United States, Japan, and the Trans-Pacific Partnership
Jeffrey J. Schott

6 Monetary Policy during Japan's Great Recession: From Self-Induced Paralysis
to Rooseveltian Resolve
Kenneth Kuttner
Data disclosure: The data underlying this analysis are available here [xlsx].

7 High-Level Panels on Japan-US Common Economic Challenges: Event Transcript