Japans econimic Policy

The Current Economy and Medium-Term Growth Prospects Summer 1999 brought several indications that the recovery is slowly starting to gather momentum. Public investment, the zero interest rate policy, and an easy lending stance backed by government credit guarantees has clearly had an effect. Full-scale private sector restructuring has also helped put corporate profits back on an uptrend and this is having a major macroeconomic impact. The authorities have recognized that the rejuvenation of industry at the …

…argument for further structural adjustment is that its proponents have apparently failed to distinguish between those facilities for which demand fluctuates in line with the business cycle and those that are in structural over-supply and will not be required even when the economy recovers. They also fail to grasp that questions relating to the retirement of surplus capacity are of a different order from whether or not capex subsequently recovers or corporate balance sheets improve.