Japan's Public Sector Balance Sheet

2019-10-04
 |  Business & Economics
Japan's Public Sector Balance Sheet

Author: Yugo Koshima

Publisher: International Monetary Fund

ISBN: 9781513514529

Category: Business & Economics

Page: 41

View: 131

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This paper compiles and reviews the evolution of Japan’s Public Sector Balance Sheet (PSBS). In the past, large crossholdings of assets and liabilities within the public sector played a role in sustaining a high level of public debt and low interest rates. The Fiscal Investment and Loan Fund (FILF) channeled all postal deposits and pension savings to financing of public sector borrowing. After the FILF refrom in 2000, however, the Post Bank and pension funds shifted their assets to the portfolio investments and are seeking to maximize risk-adjusted returns. This has changed the implications of crossholdings for public debt management. In the future, population aging is expected to add more pressures on the PSBS, which already saw a considerable decrease of net worth over the last three decades.

The Cost of Future Policy: Intertemporal Public Sector Balance Sheets in the G7

2021-05-06
 |  Business & Economics
The Cost of Future Policy: Intertemporal Public Sector Balance Sheets in the G7

Author: Yugo Koshima

Publisher: International Monetary Fund

ISBN: 9781513573335

Category: Business & Economics

Page: 48

View: 654

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This paper compiles the Intertemporal Public Sector Balance Sheets for all G7 countries and examines their relationship with government borrowing costs. In 2018, all G7 countries have negative Intertemporal Net Financial Worth (INFW), falling short of their intertemporal budget constraint. A decomposition of the evolution of INFW shows that short-term fluctuations are mainly driven by fiscal policy changes, while in the long run demographic changes and health and pension obligations play a larger role. We find that on average a 10 percentage point of GDP increase in INFW reduces the (future) 10-1 year sovereign yield curve spread by 2.8 basis points. This results suggest that financial markets pay attention to governments’ future policy obligations, in addition to its current assets and liabilities.

Korea’s Challenges Ahead—Lessons from Japan’s Experience

2017-01-18
 |  Business & Economics
Korea’s Challenges Ahead—Lessons from Japan’s Experience

Author: Ms.Edda Zoli

Publisher: International Monetary Fund

ISBN: 9781475568882

Category: Business & Economics

Page: 18

View: 615

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This paper draws out the parallels between Korea and Japan in terms of demographics, potential growth, balance sheets, asset prices and inflation. Korea’s demographic trends seem to track Japan’s with a lag of about 20 years. Low productivity in the service sector and labor market duality are common to both countries and need to be addressed with structural reforms. While Korea’s corporate balance sheets are stronger than Japan’s in the early 1990s, Korea needs to progress with the restructuring of nonviable firms to avoid the adverse consequences of delayed balance-sheet repair that Japan experienced. Given its strong fiscal balance sheet position, Korea can afford using fiscal policy actively to incentivize corporate restructuring and structural reforms and cushion their possible short-term adverse impact. Korea can prevent bubbles in asset prices that were at the origin of Japan’s initial crisis with the continued use of macroprudential policies. Although Korea does not appear to be headed toward deflation, new econometric analysis presented in the paper suggests that aging will exert a downward drag on its inflation going forward.

Reflating Japan

2016-08-02
 |  Business & Economics
Reflating Japan

Author: Ms.Elif Arbatli

Publisher: International Monetary Fund

ISBN: 9781475523140

Category: Business & Economics

Page: 46

View: 332

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Japan has ambitious economic goals: 3 percent nominal growth; 2 percent inflation; and a primary budget surplus. Abenomics has employed the three arrows of monetary, fiscal and structural policies, but the goals remain out of reach. We propose that countercyclical measures be embedded in long-run frameworks that anchor expectations for inflation and public debt. In addition, we argue for an incomes policy to assist reflation. Model simulations suggest that, combined, these proposals would make headway towards the goals, with, on balance, a better chance of success than the more unconventional policy alternatives proposed by Krugman, Svensson, and Turner from a risk-return perspective.

Republic of Korea

2016-08-26
 |  Business & Economics
Republic of Korea

Author: International Monetary Fund. Asia and Pacific Dept

Publisher: International Monetary Fund

ISBN: 9781475529920

Category: Business & Economics

Page: 90

View: 990

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This 2016 Article IV Consultation highlights that Korea’s growth has slowed after decades of impressive economic progress. The economy is facing a number of structural headwinds, including unfavorable demographic developments, heavy export reliance, pockets of corporate vulnerability, labor market distortions, lagging productivity, and high household debt. Inequality and poverty are also of concern. Growth is projected to tick up to 2.7 percent in 2016 and 3.0 percent in 2017, with inflation remaining subdued. Credit is expected to continue to grow, partly reflecting the impact of interest rate cuts, but at a slower pace consistent with the tightening of prudential measures and the envisaged moderation in construction investment after 2017.

The Red Dream

2022-08-31
 |  Political Science
The Red Dream

Author: Carl E. Walter

Publisher: John Wiley & Sons

ISBN: 9781119896173

Category: Political Science

Page: 292

View: 111

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An eye-opening deep dive into the sources and consequences of how China has financed it’s rise to global economic prominence In The Red Dream: The Chinese Communist Party and the Financial Deterioration of China, veteran finance executive Carl Walter uses his unique experience in Chinese finance to deepen his exploration of how the Chinese Communist Party finances its obsession with GDP growth and social control. Overwhelmingly debt-fueled, the party’s financial strategy has driven an unsustainable growth in banking and state enterprise assets. Inevitably the party’s own financial health is being severely weakened and China’s future over the next decades put in doubt. You’ll also find: A discussion of the financial power of local governments and the Ponzi scheme created by their sale of land use rights How China’s entry into the World Trade Organization gave rise to today’s China How the party and China’s regulators enable banks to present outstanding performance metrics An exploration of the party’s financial assets and liabilities since 1979 Examples of financial crisis management and related costs incurred by China and the US A look at Japan’s experience as a potential guide for China future development An essential read for anyone interested in international economics, geopolitics, and finance, The Read Dream will also earn a place in the hands of finance professionals, bankers, policymakers, corporate strategists, and investors.

Sovereign DisCredit

2010-04-28
 |  Business & Economics
Sovereign DisCredit

Author: David Roche

Publisher: Lulu.com

ISBN: 9781445759760

Category: Business & Economics

Page: 127

View: 179

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We've had the credit crunch and afterwards a deep economic recession. Now get ready for a sovereign debt crisis after the biggest rise in government debt globally since world war two.

The Escape from Balance Sheet Recession and the QE Trap

2014-10-27
 |  Business & Economics
The Escape from Balance Sheet Recession and the QE Trap

Author: Richard C. Koo

Publisher: John Wiley & Sons

ISBN: 9781119028123

Category: Business & Economics

Page: 353

View: 293

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Compare global experiences during the balance sheet recession and find out what is needed for a full recovery The Escape from Balance Sheet Recession and the QE Trap details the many hidden dangers remaining as the world slowly recovers from the balance sheet recession of 2008. Author and leading economist Richard Koo explains the unique political and economic pitfalls that stand in the way of recovery from this rare type of recession that was largely overlooked by economists. Koo anticipated the current predicament in the West long before others and issued warnings in his previous books: Balance Sheet Recession and The Holy Grail of Macroeconomics. This new book illustrates how history is repeating itself in Europe while the United States, which learnt from the Japanese experience, is doing better by avoiding the fiscal cliff. However, because of the liberal dosage of quantitative easing already implemented, the United States, the United Kingdom, and Japan may face a treacherous path to normalcy in what Koo calls the QE Trap. He argues that it is necessary to understand balance sheet recession in order to resolve the Eurozone crisis, particularly the competitiveness problems. Koo issues warnings against those who are too ready to argue for structural reforms when the problems are actually with balance sheets. He re-examines Japan's two decades of experiences with this rare recession and offers an insider view on the Abenomics. On China, readers will gain a very different historical perspective as Koo argues that western commentators have forgotten their own history when they talk about the re-balancing of the Chinese economy. Learn from Japan which experienced the same predicament afflicting the West fifteen years earlier Discover how unwinding of quantitative easing will affect the United States, the United Kingdom, Japan, as well as the emerging world Examine solutions to the Eurozone problems caused by two balance sheet recessions eight years apart Gain insight into China's problems from the West's own experiences with urbanisation Koo, who developed the concept of balance sheet recession based on Japan's experience, took the revolution in macroeconomics started by John Maynard Keynes in 1936 to a new height. The Escape from Balance Sheet Recession and the QE Trap offers the world cure for balance sheet recession.

The Sustainability of Asia’s Debt

2022-02-22
 |  Business & Economics
The Sustainability of Asia’s Debt

Author: Ferrarini, Benno

Publisher: Edward Elgar Publishing

ISBN: 9781800883727

Category: Business & Economics

Page: 456

View: 758

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This is an open access title available under the terms of a [CC BY 3.0 IGO] License. It is free to read, download and share on Elgaronline.com. Asia has shown the world what success in economic development looks like. From the amazing transformations of Japan, the Republic of Korea, and the other ‘tigers’ in the early 70s, to the more recent takeoffs of the People’s Republic of China (PRC), India, and the leading economies in Southeast Asia, the region has prospered at a startling pace. Technologies were adopted, productivity raised, and export markets conquered. Billions were lifted out of poverty. What was once a backwater is now a global engine of growth.

OECD Economic Surveys: Japan 2000

2000-12-06
 | 
OECD Economic Surveys: Japan 2000

Author: OECD

Publisher: OECD Publishing

ISBN: 9789264177031

Category:

Page: 220

View: 120

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This 2000 edition of OECD's periodic review of Japan's economy examines recent economic developments, policies and prospects and includes a special feature on improving the performance of public spending.

Japan

2017-09-18
 |  Business & Economics
Japan

Author: International Monetary Fund. Monetary and Capital Markets Department

Publisher: International Monetary Fund

ISBN: 9781484319901

Category: Business & Economics

Page: 57

View: 974

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Sustained demographic change can have potentially significant effects on the economy and the financial system. Aging can affect financial intermediation through its effects on potential growth, on the term structure of interest rates and risk premiums in general, and on the demand for retirement-related products and services. At the same time, in an aging society, the financial sector has a particularly important role to play in helping to foster growth and productivity. This note analyzes and quantifies the effect of aging in Japan—both at the national and regional levels—on the nature of financial intermediation and concludes that the relative role of banks is likely to diminish.