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Moderator:  Calla Wiemer (calla.wiemer@acaes.us)

Is It Tantrum Time Again?

   

In May 2013, Ben Bernanke, Chairman of the US Federal Reserve Bank, hinted at the possibility of the Fed reducing (“tapering”) its purchases of government bonds sooner than previously expected, leading to a reassessment of the likely path of US monetary tightening. Market turbulence and economic volatility in emerging market countries (EMs), including those in Asia, quickly followed. Capital inflows turned to outflows, leading interest rates to rise, asset prices to decline and—despite a run-down of foreign reserves—exchange rates to depreciate. This event came to be known as the Taper Tantrum.

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Abenomics: A Retrospective

With the August 28 announcement by Prime Minister Abe of his intention to step down from his position within weeks, his record in a number of areas will inevitably face scrutiny and evaluation. Here, I lay out, in brief, my views on his government’s macroeconomic policies, which quickly became known as Abenomics. Like most governments, his had both successes and missed opportunities. But Japan clearly has changed as a result of his economic policies. And the debate around Abenomics anticipated issues that remain highly relevant in the current global policy debate.

The context

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Can Japan Learn to Work from Home?

Japan has, for several decades, experienced a toxic combination of an aging and shrinking population, slow growth, and very large fiscal deficits and debt. Looking forward, Japan’s potential growth is expected to approach zero, in large part owing to its demographic profile (see IMF).

These interrelated issues have led policy-makers in Japan on a search for meaningful structural reforms to raise potential growth and offset the impact of eventual fiscal adjustment. One area that has received significant attention has been the Japanese  labor market, which is characterized by low female labor force participation; a significant duality between heavily-protected workers and “non-regular” workers with few protections and lower productivity; and limited flexibility regarding working conditions and modalities (Figure 1).

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