Policies and Prospects in Japan and the Implications for the Asia-Pacific Region

Author/Editor:

Tim Callen ; Warwick J. McKibbin

Publication Date:

September 1, 2001

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper uses the G-Cubed (Asia-Pacific) model-a macroeconomic model with rich cross-country links-to explore the implications for Japan and Asia of several shocks to the Japanese economy. The results suggest that, while fiscal consolidation in Japan would initially dampen domestic growth, over the medium term the impact on both the domestic and regional economies would be positive. Quantitative monetary easing in Japan would boost domestic activity in the short-run, while being basically neutral for the region. Finally, a loss of confidence in the yen would be negative for Japan, but positive for the region because of a reallocation of capital flows toward non-Japan Asia.

Series:

Working Paper No. 2001/131

Subject:

Expenditure Exports Financial services Fiscal consolidation Fiscal policy Imports International trade Real interest rates Stocks

English

Publication Date:

September 1, 2001

ISBN/ISSN:

9781451855289/1018-5941

Stock No:

WPIEA1312001

Pages:

57

Please address any questions about this title to publications@imf.org