on the present state of the japanese economy: message to european economy
TRANSCRIPT
Motoshige ITOHCouncil on Economic and Fiscal Policy, Japan
Gakusyuin University
On the Present State of the Japanese Economy:
Message to European Economy
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◆ Lack of Demand
◆ Legacy of the Global Financial Crisis
◆ Demographic changes such as ageing
◆ Slowdown in innovation and technological diffusion
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Secular Stagnation?
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40 Share of older population
Japan USGermany FranceUK ItalyCanada
(Source) IMF, World Economic Outlook Database Apr 2016 (Source)United Nations, World Population Prospects, the 2015 Revision
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Sluggshi innovation: TFP has been very low since 1980s
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Low interest of major countries
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US Euro Area UK
Japan
(％） Policy Rates
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Expanding money balance
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Monetary Base
US Euro Area UK Japan
（％、 GDP ratio ）
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Fiscal balance
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-12
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Canada France Germany Italy
Japan UK US
（％、 GDP ratio ）Fiscal Balance
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◆ Three arrows of monetary stimulus, flexible fiscal policy, and structural reforms are required.
◆Fiscal Stimulus which complements monetary policy plays an essential role under the current situation. ◆ Quality investment and expenditure to boost potential demand are keys.
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Necessary Policy Coordination
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Japan’s nominal GDP
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Ratio of Current profit to sales
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Trends of unemployment rate and job-offer job-seeker ratio
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Consumer price index: inflation rate
-------- excluding energy ------------- including energy
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◆ Corporate Governance Reform◆ Pro-growth corporate tax reform◆ EPA(FTA) and agricultural reform◆ Expansion of private participation in
public services (PPP, PFI)◆ Increased labor participation of women
and elderly people3
Abenomics in Progress: Growth Strategy
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１． Realizing Productivity Revolution - The 4th Industrial Revolution - Regulatory reform
２． Increasing investment in new growth areas - Environment (Investment in energy saving, renewable and
alternative sources) - Healthcare, medical and other senior market - Education, human resource development３．Mitigating the impacts of labor force decline - Further active participation of women and the elderly - Utilization of foreign human resources - Labor market reform
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Acceleration of Growth Strategy
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