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https://hdl.handle.net/2440/109584
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Type: | Book chapter |
Title: | Keynes and capitalism: The case of Japan |
Author: | Rogers, C. |
Citation: | Keynesian Reflections: Effective Demand, Money Finance and Policies in the Crisis, 2013 / Hirari, T., Marcuzzo, M., Mehrling, P. (ed./s), Ch.5, pp.94-115 |
Publisher: | Oxford University Press |
Publisher Place: | New Delhi, India |
Issue Date: | 2013 |
ISBN: | 0198092113 9780198092117 |
Editor: | Hirari, T. Marcuzzo, M. Mehrling, P. |
Statement of Responsibility: | Colin Rogers |
Abstract: | This chapter applies Keynes’s principle of effective demand to re-interpret the analysis of Japan’s lost decade(s) by Krugman, McKinnon, and Koo. The analyses by Krugman, McKinnon, and Koo are shown to be special or restricted cases of Keynes’s general theory. Faced with a negative structural marginal efficiency of capital due to international forces, domestic fiscal policy loses its effectiveness. Contra Krugman, Japan cannot then inflate its way out of the liquidity trap; contra McKinnon Japan cannot restore growth by pegging to the US dollar; contra Koo a balance sheet recession is not the cause of Japan’s slower growth. The causes of Japan’s slower growth are international factors that depressed the domestic marginal efficiency of capital in the post-bubble period. Predominant among these factors was the rise of China and the rest of Asia. |
Keywords: | Japan; principle of effective demand; marginal efficiency of capital; liquidity trap; balance sheet recession |
Rights: | Copyright status unknown |
DOI: | 10.1093/acprof:oso/9780198092117.003.0005 |
Published version: | http://dx.doi.org/10.1093/acprof:oso/9780198092117.003.0005 |
Appears in Collections: | Aurora harvest 3 Economics publications |
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RA_hdl_109584.pdf Restricted Access | Restricted Access | 1.86 MB | Adobe PDF | View/Open |
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