This chapter provides background on the adoption of Abenomics by Japan at the end of 2012, and examines the output and labour market impacts of specific policy measures. Japanese economic performance in the previous two decades had not been as dismal as had often been portrayed, but it was characterized by deflation and stagnation that had left Japan’s nominal GDP in 2012 at a level 8 per cent lower than in 1997. Real GDP in 2012 was still below its 2007 peak and employment had declined each year since 2009 despite the quantitative easing of the Bank of Japan and government budget deficits that had taken the gross government debt-to-GDP ratio to almost 230 per cent of GDP. There was widespread support among intellectuals that Japan should just accept stagnation as the natural result of population decline and ageing. Yet Shinzo Abe, advised by ‘old Keynesian’ economists, managed to get elected as prime minister with the promise that more expansionary macroeconomic policies would raise output, employment and living standards. The chapter provides evidence for the conclusion that Abenomics has been, on balance, expansionary, and has been successful in overcoming deflation, stimulating growth of output and employment, and producing the tightest labour market in decades.
Paul Bowles and Brian K. MacLean
Asian regional financial cooperation has its origins some two decades ago with the spur being the 1997–98 Asian Financial Crisis. Regional financial cooperation took place under the auspices of the ASEAN+3 grouping, but China was initially a reluctant player. Over time, China gradually began to participate and then to assert its regional leadership credentials and has participated more fully in processes such as the multilateralization of the Chiang Mai Initiative. However, at the same time that China became more interested in leadership of Asian financial cooperation, that process has slowly ground to a halt and now stands, some 20 years later, at its point of least relevance. This, in part, results from China’s other initiatives such as renminbi internationalization and the Asian Infrastructure Investment Bank, as well as other developments at the national and global levels. We analyse how Asian regional financial cooperation has been, and continues to be, subject to intra-regional rivalry between China and Japan.
Brian K. MacLean, Hassan Bougrine and Louis-Philippe Rochon
With an emphasis on developments during and after the Great Recession, and paying due attention to the impacts of austerity policies, the chapters assembled here explain that the maintenance of a suitably high growth of aggregate demand is as essential as ever to achieving full employment and rising living standards. Written by distinguished Keynesian and Post-Keynesian economists from diverse national backgrounds, the chapters tackle theoretical and empirical issues in an effort to illuminate the economic experiences of both large areas of the world and specific economies.