Monday, November 01, 2010

Japan as Number One again

Since the sub-prime crisis began in 2008, we've seen story after story on the supposed lessons Japan holds for the US.

Most of these seem to be of use to those who want to push their own political/economic agenda at home using Japan as evidence to support their opinions. On his NYT blog recently, Paul Krugman used Japan as an example of why Friedman's monetarism does not work. However he has not, to my knowledge, used Japan's experience with Keynesian stimulus to claim that Keynesian economics do not work except to say that not enough was done and what was done was not soon enough---just as he says is the problem in the US.*

R.Taggert Murphy has posted a short piece on Japan Focus, Japan as Number One in the Global Economic Crisis: Lessons for the World?, which looks at Japan from another perspective. My short, overly simplistic summary of his piece is that Japan may have been the first country to experience the "New Normal."

*Krugman's blog, his NYT column, and perhaps his ABC This Week appearances are where he pushes partisan political opinion and probably should not be regarded in the same light as his economic work.


  1. 1. Seeing as everyone is now down on the weak Japanese economy, is that why the yen is at post war high via a vis the dollar?
    2. Surely a good time to buy dollars now. Can't get any weaker, US being so much sounder than Japan and all?
    3. Can you lend me some yen to buy bucks, please?

  2. Hello. Sorry for the question - probably it doesn't matter to you. But I represent one Russian web-site and if you'd like to comment the reaction on the Russian president's visit to Kurily islands among Japaneeze society - we'd be grateful.
    Best wishes anyway)

    P.S. By the way: may be you'd like to publish something on our site? Translation into Russian is possible.
    Best regards,

  3. Our Man:

    1. I don't think that you are allowed to ask that sort of question. It takes away from the current narrative.

    2. As Japan continues to decline, I expect that investors will continue to show their lack of confidence in Japan by continuing to buy yen. Therefore, your point about the dollar not being able to get any weaker is incorrect.

    3. Expecting a Tea Party victory tomorrow?

  4. Mapat: I will look into that.