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| Author | : Tatsuya Takeda |
| Publisher | : |
| Total Pages | : |
| Release | : 2015 |
| Genre | : |
| ISBN | : |
| Author | : Takero Doi |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2011 |
| Genre | : Debts, Public |
| ISBN | : |
We construct quarterly series of the revenues, expenditures, and debt outstanding for Japan from 1980 to 2010, and analyze the sustainability of the fiscal policy. We pursue three approaches to examine the sustainability. First, we calculate the minimum tax rate that stabilizes the debt to GDP ratio given the future government expenditures. Using 2010 as the base year, we find that the government revenue to GDP ratio must rise permanently to 40%-47% (from the current 33%) to stabilize the debt to GDP ratio. Second, we estimate the response of the primary surplus when the debt to GDP ratio increases. We allow the relationship to fluctuate between two "regimes" using a Markov switching model. In both regimes, the primary surplus to GDP ratio fails to respond positively to debt, which suggests the process is explosive. Finally, we estimate a fiscal policy function and a monetary policy function with Markov switching. We find that the fiscal policy is "active" (the tax revenues do not rise when the debt increases) and the monetary policy is "passive" (the interest rate does not react to the inflation rate sufficiently) in both regimes. These results suggest that the current fiscal situation for the Japanese government is not sustainable.
| Author | : Naoyuki Yoshino |
| Publisher | : |
| Total Pages | : 19 |
| Release | : 2015 |
| Genre | : |
| ISBN | : |
Japan's debt-to-gross domestic product (GDP) ratio is the highest among Organisation for Economic Co-operation and Development (OECD) countries. This paper will firstly answer the question of whether Japanese government debt is sustainable. Next, while the Domar condition and Bohn's condition are often used in the literature to check whether a government's debt situation is in a dangerous zone, this paper will show that the Domar condition is obtained only from the government budget constraint (namely the supply of government bonds) and does not take into account the demand for government bonds. A simple comparison of the interest rate and the growth rate of an economy using the Domar condition is not adequate to check the stability of a government's budget deficit. Both the interest rate and the growth rate of the economy are determined endogenously in the model. Thirdly, this paper shows that Bohn's condition satisfies the stability of the government budget in the long run by imposing constraints on the primary balance. However, Bohn's condition does not achieve economic stability -- even if the condition is satisfied, the recovery of the economy may not be achieved. This paper will propose a new condition that satisfies both the stability of the government budget and the recovery of the economy. The paper will shed light on these issues both theoretically and empirically. The empirical findings declare that in order to achieve fiscal sustainability based on the optimal fiscal policy rule provided in this paper, both sides of the Japanese government budget (expenditure and revenue) need to be adjusted simultaneously. Moreover, the results show that the decrease in government expenditure has to be to more than the increase in tax revenue.
| Author | : Toshihiro Ihori |
| Publisher | : Springer Science & Business Media |
| Total Pages | : 172 |
| Release | : 2012-12-06 |
| Genre | : Business & Economics |
| ISBN | : 1475735286 |
Government Deficit And Fiscal Reform In Japan presents a theoretical-based comprehensive analysis of economic consequences of government deficits and fiscal reform in Japan. Particular emphasis is directed at developing tools that can be applied to theoretically and empirically clarify essential economic concerns in Japan such as generational incidence of fiscal reform and a growing dependence on government bonds for covering financial deficits. This book evaluates the recent movement of Japanese fiscal reform and government deficit. The authors first summarize fiscal policy in 1990's. Then, they move on to investigate the macroeconomic impact of government dept and the sustainability problem, and then discuss benefits and costs of public investment. The political aspect of fiscal reconstruction movements in Japan is also examined. Finally, the authors investigate the behavior of central government's control on local governments' debt issuance and its effect on the real activities of local governments. This book points out that the long-run structural fiscal reform is more important than the short-run Keynesian fiscal policy in Japan.
| Author | : Keimei Kaizuka |
| Publisher | : Springer |
| Total Pages | : 238 |
| Release | : 2006-07-04 |
| Genre | : Business & Economics |
| ISBN | : 1137001569 |
This book examines how Japan should cope with fiscal challenges, as demands on the budget from an ageing society have necessitated the reigning in of public debt and the revamp of the pension and healthcare systems. It combines insights from academic research with the views of policymakers to distil key issues that need to inform public debate.
| Author | : Shiro Patrick Armstrong |
| Publisher | : |
| Total Pages | : 9 |
| Release | : 2016 |
| Genre | : |
| ISBN | : |
Japanese government debt is at unprecedented levels with a gross debt to gross domestic product ratio of over 230)per cent and a net debt to gross domestic product ratio of 150)per cent. There are three big challenges to fiscal sustainability: the huge amount of government bonds outstanding; continued budget deficits; and the growing age-related spending. The debt is sustainable as long as the market as a whole believes it is. The path to fiscal consolidation requires increasing the tax rate, reducing spending, broadening the tax base and growing the economy out of trouble. The longer the delay before moving to a more sustainable consolidation path, the larger the risks and closer Japan moves towards a financial crisis. The policy goal is to keep government debt sustainable, not to repay it all. Just as Japan has done since the burst of the asset bubble in the early 1990s, there is every likelihood that the Japanese economy will muddle through.
| Author | : Christian Miguel Broda |
| Publisher | : |
| Total Pages | : 68 |
| Release | : 2004 |
| Genre | : Fiscal policy |
| ISBN | : |
"We analyze fiscal policy and fiscal sustainability in Japan using a variant of the methodology developed in Blanchard (1990). We find that Japan can achieve fiscal sustainability over a 100-year horizon with relatively small changes in the tax-to-GDP ratio. Our analysis differs from more pessimistic analyses in several dimensions. First, since Japanese net debt is only half that of gross debt, we demonstrate that the current debt burden is much lower than is typically reported. This means that monetization of the debt will have little impact on Japan's fiscal sustainability because Japan's problem is the level of future liabilities not current ones. Second, we argue that one obtains very different projections of social security burdens based on the standard assumption that Japan's population is on a trend towards extinction rather than transitioning to a new lower level. Third, we demonstrate that some modest cost containment of the growth rate of real per capita benefits, such as cutting expenditures for shrinking demographic categories, can dramatically lower the necessary tax burden. In sum, no scenario involves Japanese taxes rising above those in Europe today and many result in tax-to-GDP ratios comparable to those in the United States"--National Bureau of Economic Research web site.
| Author | : Ryo Horii |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2023 |
| Genre | : |
| ISBN | : |
“Fiscal consolidation cannot be achieved without economic growth,” is a symbolic statement by the Japanese government, announced repeatedly in the last two decades. However, the actual plan accompanied by this statement was to implement austere fiscal policy in successive years to regain a positive primary balance. This article argues that such an attempt could be one reason Japan failed to achieve either fiscal consolidation or economic growth for the last 30 years. We explain the debt sustainability condition considering the possibility that the growth rate is higher than the interest rate, typically observed in advanced countries in the post-war period. In this definition, debt sustainability depends more sensitively on the GDP growth rate than the primary balance. Reductions in growth-enhancing public investment will worsen debt sustainability even when they improve the primary balance, confirming the initial statement.
| Author | : Kiichi Tokuoka |
| Publisher | : International Monetary Fund |
| Total Pages | : 26 |
| Release | : 2010-01-01 |
| Genre | : Business & Economics |
| ISBN | : 1451962266 |
Despite the rapid rise in public debt and large fiscal deficits, Japanese Government Bond (JGB) yields have remained fairly stable. Possible factors include: Japan's sizeable pool of household savings, presence of large and stable institutional investors, and strong home bias. These factors are likely to persist for some time, but going forward, the market's capacity to absorb debt is likely to diminish, as population aging reduces savings inflows and financial reforms enhance risk appetite. This could in turn strengthen the link between JGB yields and the stock of public debt. In light of these structural changes in the market, fiscal consolidation will be key for maintaining market stability.
| Author | : Benno Ferrarini |
| Publisher | : Routledge |
| Total Pages | : 227 |
| Release | : 2012 |
| Genre | : Business & Economics |
| ISBN | : 0415522218 |
Addressing the global financial crisis has required fiscal intervention on a substantial scale by governments around the world. The consequent buildup of public debt, in particular its sustainability, has moved to center stage in the policy debate. If the Asia and Pacific region is to continue to serve as an engine for global growth, its public debt must be sustainable. Public Debt Sustainability in Developing Asia addresses this issue for Asia and the Pacific as a whole as well as for three of the most dynamic economies in the region: the People’s Republic of China, India, and Viet Nam. The book begins with a discussion of the reasons for increased attention to debt-related issues. It also introduces fiscal indicators for the Asian Development. Bank’s developing member countries and economies. The sustainability of their debt is assessed through extant approaches and with the most up-to-date data sources. The book also surveys the existing literature on debt sustainability, outlining the main issues related to it, and discusses the key implications for the application of debt sustainability analysis in developing Asia. Also highlighted is the importance of conducting individual country studies in view of wide variations in definitions of public expenditure, revenues, contingent liabilities, government structures (e.g., federal), and the like, as well as the impact of debt on interest rates. The book further provides in-depth debt sustainability analyses for the People’s Republic of China, India, and Viet Nam. Public Debt Sustainability in Developing Asia offers a comprehensive analytical and empirical update on the sustainability of public debt in the region. It breaks new ground in examining characteristics that are crucial to understanding sustainability and offers richer policy analysis that should prove useful for policymakers, researchers, and graduate students.
