Back Matter

Back Matter

Author(s):
Dennis Botman, Stephan Danninger, and Jerald Schiff
Published Date:
March 2015
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    Contributors

    Chie Aoyagi, a Japanese national, is currently an Economist in the IMF’s Regional Office for Asia and the Pacific in Tokyo. Her research focuses on structural reforms in Japan. She joined the IMF in 2012. Prior to that, she was an assistant equity analyst and economist at Nomura Asset Management. She graduated in 2008 from the University of California, Los Angeles with a bachelor’s degree in International Development.

    Serkan Arslanalp is a senior economist in the Monetary and Capital Markets Department of the IMF, contributing to the Global Financial Stability Report on issues related to sovereign risk, financial stability, and capital markets. He has participated in the recent Financial Sector Assessment Program (FSAP) Update for Japan. Mr. Arslanalp joined the IMF in 2004 and worked in the Fiscal Affairs Department on a range of surveillance and program countries, including the Stand-By Arrangement program on Ukraine in 2008. He holds an undergraduate degree in Economics from the Massachusetts Institute of Technology and a PhD in Economics from Stanford University.

    Dennis Botman is a Deputy Division Chief in the IMF’s Asia and Pacific Department. He joined the IMF in 2002 and has worked on various assignments, including the Economic Modeling Division in the Research Department and in the Fiscal Affairs Department. Prior to his current assignment he was the IMF’s Resident Representative in the Philippines. His research covers a variety of topics, including general equilibrium modeling, financial crises and speculative attacks, aging and social security reform, and public finance. He holds a PhD from the University of Amsterdam, the Netherlands.

    Stephan Danninger is a Division Chief in the IMF’s Asia and Pacific Department. He joined the IMF in 2000 and has worked on various assignments, including the IMF’s World Economic Studies Division responsible for the publication of the World Economic Outlook (WEO). His research covers a variety of topics, including determinants of countries’ export competitiveness, fiscal reforms, cross-country spillovers of financial stress, and growth enhancing structural reforms. He holds a PhD from Columbia University, New York.

    Giovanni Ganelli, an Italian national, joined the IMF in 2003. Before being assigned to the Regional Office for Asia and the Pacific in Tokyo in August 2012, he was based at the IMF’s headquarters in Washington, D.C., where he worked in the Fiscal Affairs and European Departments, and the IMF’s Institute for Capacity Development. During his IMF career he has participated in work on various countries in Europe, Asia, and Africa. He is currently a member of the IMF team that carries out the annual Article IV consultation with Japan. He holds a PhD in Economics from the University of Warwick (UK). His research focuses on fiscal policy issues.

    Joong Shik Kang is an Economist in the IMF’s Asia and Pacific Department. Prior to this, he worked in the Research Department, on several multilateral surveillance issues, including the World Economic Outlook, G20 surveillance, and commodities. His research covers a variety of topics, including international risk sharing, internal devaluation, global rebalancing, and exchange rates. Mr. Kang is a national of the Republic of Korea and received his BA at Seoul National University and MS and PhD degrees at the University of Wisconsin-Madison.

    Raphael Lam is currently the IMF’s Deputy Resident Representative to China. In previous positions at the IMF, he has covered a range of Asian economies, including China, Japan, and Hong Kong SAR. He has participated in the Japan Financial Sector Assessment Program and was involved in regional surveillance in Asia. During his tenure in the European Department, he participated in the IMF’s lending program to Iceland during the global financial crisis and worked on Sweden and Israel. His research interests include finance, trade and investment, and regional development and spillovers. He has a PhD in Economics from the University of California and was a lecturer at the University of California, Los Angeles. He has worked in the research department of the Hong Kong Monetary Authority and has also served as research visiting scholar at the Hong Kong Institute of Monetary Research.

    Malhar Nabar is a Senior Economist in the IMF’s Asia and Pacific Department, covering Japan. Prior to this, he worked on China and Hong Kong SAR and in the Regional Studies Division for the Asia-Pacific region. Before Mr. Nabar joined the IMF in 2009, he was on the faculty at Wellesley College. His research interests are in financial development, investment, and productivity growth. Mr. Nabar holds a PhD in economics from Brown University.

    Ikuo Saito is an Economist in the IMF’s Asia and Pacific Department. He works on Japan, the Federated States of Micronesia, and the Republic of the Marshall Islands. Before joining the IMF, he worked for the Japanese Ministry of Finance, where he was deputy director in charge of tax and international finance issues. He received a BA in law from the University of Tokyo, an MA in international policy studies from Stanford University, and an MPA from Syracuse University.

    Jerald Schiff is Deputy Director of the IMF’s Asia and Pacific Department (APD) and Mission Chief for Japan. He previously served as a Senior Advisor in the Office of the Managing Director of the IMF, as well as Assistant Director of APD and Divison Chief in the European Department. Mr. Schiff received his AB at Cornell University and MS and PhD degrees at the University of Wisconsin. He has also taught at Tulane University and the American University School of International Service and worked in the U.S. Department of Treasury.

    Chad Steinberg is a Senior Economist at the IMF and works currently in the Emerging Markets Division of the Strategy, Policy, and Review Department. He spent four years as Regional Representative in Tokyo and Desk Economist on Japan. He has published extensively on growth and labor reform issues in Japan, including on female labor force participation. Mr. Steinberg holds a BA from the University of Pennsylvania and a PhD and NPP from Harvard University.

    Index

    Page numbers followed by italic f or t refer to figures or tables, respectively.

    A

    • Abe, Shinzõ, 3

    • Abenomics

      • conceptual basis of, 3, 51

      • corporate investment and, 61–62

      • debt projections, 54, 63, 69, 70f

      • effects on the financial sector, 125

      • financial sector policies, 6–7

      • fiscal policies, 4–5, 30, 46, 70

      • growth strategy of, 5–6, 30, 94, 96

      • implications for cross-border lending, 138–143

      • implications of population aging for, 29, 43–47, 49

      • interest rate projections under, 60–61, 61f, 63

      • labor market reforms to support implementation of, 108

      • medium-term projections, 29, 46

      • monetary easing strategies, 25–26, 27, 30, 36

      • monetary policy of, 12–13, 24–26, 30, 33–34, 46

      • outcomes to date, 7–8, 29, 30–36, 31f, 47

      • perceptions and expectations regarding, 3

      • policy coordination in, 26

      • portfolio rebalancing toward risk capital under, 125–132, 144–146

      • projected economic outcomes of, 45f, 63

      • risks of, 30, 44–47, 49, 132–138, 143–144

      • stimulus measures, 4–5

      • structural reforms to promote growth, 96–97

      • three arrows of, 3, 97f

      • See also Global spillover effects of Abenomics

    • Aging, population

      • causes of, 36–37, 39

      • challenges for Japan, v

      • as contributing factor in recent economic declines, 2

      • dissaving behaviors, 43, 47–48

      • effects on inflation and growth, 40–43, 41f, 55, 93

      • global risks from, 48–49

      • health care spending and, 83

      • implications for Abenomics policies, 29, 43–47, 48–49

      • implications for fiscal consolidation, 87

      • implications for fiscal-monetary policy coordination, 24

      • implications for the labor market, 37, 39–42, 47, 48, 108

      • interest rates and, 60

      • international comparison of, 36f

      • labor participation of older workers, 114–115

      • linkages to national economic performance, 37–40, 47–48

      • pension eligibility, 82

      • political economy and, 38, 39

      • public debt and, 51, 65–66

      • public spending trends and, 71

      • trends and projections, 36f, 93

    • Agricultural sector, 6, 101–102

    • Allowance for corporate equity, 80

    • Antimonopoly Act, 101

    • Asian financial crisis (1997), 1, 42, 55–56, 67

    • Asset-price collapse of 1990s

      • bubble development and, 13

      • corporate investment since, 147, 149, 153, 161

      • course of recovery from, 14

      • effects on demand, 1

      • growth declines related to, 92–93

      • Japan’s debt levels and, 54, 67

      • monetary policy responses, 13–14

    • Australia, 104

    • Austria, 100

    B

    • Bank of Japan

      • Abenomics implementation, 3–4

      • asset purchase program of 2000s, 17, 20, 24–25, 26–27

      • communication and transparency of monetary policy, 21

      • exit from monetary easing policies, 46–47

      • forward guidance role of, 21–23, 27

      • government bond purchases, 4, 6, 17, 26, 136, 144

      • monetary easing policy in Abenomics, v, 25–26

      • shortcomings of policy responses to deflation, 2

    • Birth rate, 2, 39, 72

    • Business environment

      • barriers to exit and entry, 130–132, 145

      • corporate tax rate, 6, 71, 77–80, 78f, 79f, 87, 96, 103, 103f

      • firm-level governance, 103, 158, 161

      • growth-promoting reforms in, 96

      • immigration–entrepreneurship linkage, 99

      • policy reforms to promote competitiveness, 101–102

      • strategies to promote foreign direct investment, 104

    C

    • Carry-trades, 169, 170–171

    • Child care, 113–114, 123

    • China, 104, 165, 166

    • Competitiveness

      • global spillover effects of, 163

      • growth strategies based on increasing, 96, 101–102

      • trends, 8, 78–79

    • Comprehensive Monetary Easing policy, 17, 23

    • Consumer confidence, 3, 4–5, 8, 36, 63, 175. See also Inflation and growth expectations

    • Consumption tax

      • debt levels and, 55–56, 69

      • debt-to-GDP ratio projections and, 57–58

      • implementation of Abenomics reforms, 5, 8, 30, 36, 43–44, 57, 77

      • international comparison, 74, 75f

      • lessons from 2014 increase, vi

      • rationale for increasing, for fiscal consolidation, 71, 74–77, 75f

      • recommendations for fiscal consolidation, 87–88

      • regressivity and equity concerns, 76–77, 86

      • revenue, 73

    • Corporate investment

      • Abenomics implementation and, 31f

      • cash holdings versus, 156–158, 157f, 161

      • contributions to growth, 147, 148f

      • current conditions favoring higher, 147, 148f

      • determinants of, 7, 147–148, 153–158, 154f, 161

      • firm size and, 149–151, 150f

      • foreign investment by Japanese corporations, 149, 157f

      • international comparison, 151f, 157f

      • in Lost Decade, 1

      • policy reforms to promote, as growth strategy, 96–97, 102–103, 159–161

      • recent patterns and trends, 147, 148f, 149–153, 149f, 150f, 161

      • research and development spending, 153

      • sectoral distribution of, 148, 149–150, 151f

    • Credit system

      • bank lending to corporate sector, 156f

      • cross-border lending by Japanese banks, 138–143, 139f, 140f, 141f, 164, 167–169

      • data collection and dissemination, 161

      • deflation effects on, 11

      • demand, 7, 8, 20, 39, 130–131

      • effects of monetary easing on, 20

      • future challenges and opportunities for policymakers, 7

      • policies to expand provision of risk capital, 144–145, 146

      • policies to promote corporate investment, 159–161

      • population aging effects in, 39

      • risks of Abenomics in, 143–144

      • securitization product issuance, 126, 129f, 144–145

      • small business loans, 126–129

      • zombie borrowers, 93, 102, 132

    D

    • Debt-to-GDP ratio

      • causes of rise in, 51, 54–57, 67

      • corporate sector, 158f

      • current, v, 51

      • future challenges and opportunities for policymakers, v, 67, 69–71

      • interest rate growth differential and, 59–65

      • Japan’s commitment to lower, 53, 56–57

      • population aging and, 41f, 51, 54, 55

      • projections, 45f, 53, 54, 57–58, 58f, 70f

      • recent patterns and trends, v, 54, 56

      • risks from, 51, 53–54

      • See also Fiscal consolidation; Public debt

    • Deficit spending, 24

    • Deflation

      • causes of, 1, 15

      • in course of 1990s asset bubble, 14

      • declines in growth and, v, 1, 93

      • effectiveness of quantitative easing policies on, 17–20, 18f

      • effects on compensation, 11

      • future challenges for Japan, v

      • mechanisms for transmission of population aging effects on, 37–40

      • policies to counter effects of population aging on, 44

      • policy coordination to address, 23–24

      • population aging as obstacle to recovery from, 40, 43, 48

      • price-level targeting to address, 16

      • recent patterns and trends, 12f

      • shortcomings of policy responses to, 2

    • Demand and consumption

      • business expectations of, investment behavior and, 153–154, 155, 159

      • in credit market, 7, 8, 20, 39, 130–131

      • effects of global financial crisis on, 93–94

      • goals of monetary easing, 25

      • for health services, 84, 87, 100

      • in Lost Decade, 1

      • outcomes of Abenomics policies, 8, 30–32, 31f

      • policy responses contributing to recent economic problems, 2

      • population aging and, 37, 37f, 39–40, 41f, 42, 43, 48

      • projected effects of Abenomics on, 4, 45f

      • stimulus spending effects on, 55

    • Dot-com bubble, 15

    E

    • Earthquake, Great East Japan (2011), 1, 2, 53, 54, 56, 67, 166, 169

    • Energy sector, 102

    • Entrepreneurship, 99

    • Equity markets

      • Abenomics effects on, 31f, 35, 35f

      • effects of monetary easing policies on, 18, 20

      • foreign investment in, 168, 172

    • Excess cost growth, 66

    • Exchange rate

      • in Abenomics reforms, 4, 25, 45f

      • corporate investment patterns and, 153, 154

      • in course of 1990s asset bubble, 14

      • effects of monetary easing policies on, 19, 20

      • global implications of policy outcomes, 8–9, 173

      • patterns and trends, 169, 171f

      • population aging and, 38, 41f, 42, 43, 48

      • trade balance and, 172, 172f

      • yen as funding currency for carry-trades, 169, 170–171

      • yen’s safe-haven status, 169–170

    • Exports

      • Abenomics impact on, 30–32, 31f

      • exchange rate fluctuations and, 172, 172f

      • foreign direct investment and, 165, 166f

      • foreign value added of, 166–167

      • future prospects, 8, 29

      • global spillover of Abenomics effects on, 163, 165

      • outcomes of Abenomics to date, 8

      • patterns and trends, 103–104, 165, 166f, 172, 172f

      • prospects for growth and, 94

      • regional, import content from Japan for, 167, 167f

      • regional competitiveness, 167

      • trade agreements to promote growth, 104

    F

    • Financial crisis. See Asian financial crisis (1997); Global financial crisis (2008)

    • Financial intermediation, 7, 102, 128f

    • Financial sector

      • Abenomics strategies for reform in, 6–7

      • asset allocations, 127f

      • capital flows after Abenomics implementation, 35, 35f

      • challenges for Japan, v

      • cross-border lending activities of, 138–143, 139f, 140f, 141f, 164, 167–169

      • effects of Abenomics policies on, 125

      • effects of asset bubble collapse, 93

      • effects of quantitative easing policies on, 17–20, 18f, 19f

      • growth-promoting reforms for, 96, 102–103

      • international comparison of asset size of major banks, 139f

      • policies to expand provision of risk capital, 144–145, 146

      • policies to prevent bubbles, 13

      • recommendations for reforms in, vi

      • risks for banks holding government bonds, 132–138

      • risks of Abenomics for, 143–144

      • small business loans, 126–129

      • stresses of 1990s economic shocks, 14

      • transition to higher risk environment, 6, 7

    • Financial Stability Board, 143

    • Finland, 94, 100

    • Fiscal consolidation

      • challenges, 87

      • consumption tax increase for, 74–77

      • corporate income tax reform for, 77–80

      • goals of Abenomics, 30, 56, 63

      • government bond yields and, 53, 60

      • health care reform for, 83–84

      • institutional setting for, 71

      • intergenerational equity considerations, 69, 77, 84–87

      • pace of, 69–70, 86, 88

      • pension reform for, 80–83

      • population aging and, 24, 38, 43, 44, 47–48, 87

      • recommended policies to promote, 71, 87–88

      • risks of exit from deflation in, 69

      • spending cuts versus tax increases for, 70–71

    • Fiscal Investment and Loan Program, 59

    • Fiscal policy

      • Abenomics strategies, 3, 4–5, 46

      • the Lost Decade and, 11

      • effectiveness of, since 1980s, 55–56

      • monetary policy coordination with, 12, 23–24, 26

      • population aging considerations in, 43–44, 48

      • recommendations for reforms in, vi

      • See also Fiscal consolidation

    • Fiscal Structure Reform Act, 56

    • Flexicurity, 118–120

    • Foreign investment

      • corporate income tax rate and, 78–79

      • cross-border lending by Japanese banks, 138–143, 139f, 140f, 141f, 164

      • export patterns and, 165, 166f

      • foreign yen holdings, 169

      • by Japanese corporate sector, 149

      • in Japanese equity markets, 168, 172

      • in Japan’s government bond market, 53–54, 62, 136, 168

      • outward, 130, 131f

      • population aging and, 43

      • projected effects of Abenomics on, 45f

      • promoting, to promote growth, 104

      • spillover effects of Japan’s overseas production, 163, 165, 174

      • yen as funding currency for carry-trades, 169, 170–171

    • Forward guidance from central bank, 12, 21–23, 26, 27

    • France, 91

    G

    • G20, 53, 56

    • Germany, 62, 91, 93, 100, 111, 168

    • Global economy

      • challenges for Japan, v, 9

      • generalizability of Abenomics to, vi

      • Japan’s linkage in, 176

      • See also Global spillover effects of Abenomics

    • Global financial crisis (2008)

      • current health of bank balance sheets, 126, 129f

      • effects on growth, 93–94

      • exchange rate fluctuations in, 169

      • Japan’s debt levels and, 54

      • labor market outcomes of, 107

      • outcomes in Japan, 1, 56

    • Global Integrated Monetary and Fiscal model, 29, 40

    • Global spillover effects of Abenomics

      • channels for transmission of, 8–9, 163–164, 173, 176

      • experience to date, 164, 171–172

      • foreign direct investment as source of, 174

      • interest rate differentials and, 174

      • Japan’s safe-haven status as source of, 164, 169–171

      • model simulations, 173–174

      • portfolio rebalancing as source of, 173–174

      • risk of, 164–165, 173–176

      • supply-chain linkages as source of, 163, 166–167, 174

      • from tail risks, 175

      • through cross-border credit exposures, 164, 167–169

      • through Japan’s overseas production and

      • investment, 163, 165

    • Government bonds

      • Abenomics goals and outcomes for, 3, 4, 26, 30

      • Abenomics policy effects on, 132–138

      • central bank purchase of, 4, 6, 17, 26, 136, 144

      • composition of investor base, 52–53, 52f, 60, 61f, 62, 134f

      • current demand for, 6–7

      • effects of monetary easing on, 18, 18f

      • financial sector holdings of, 126, 132

      • foreign ownership of, 53, 62, 168

      • funding structure risks, 53

      • global market, 62

      • global spillover risks from spike in, 175

      • impact of Lost Decade policies in, 12

      • international comparison of domestic ownership of, 52, 52f

      • population aging and, 38

      • potential risks of Abenomics, 46

      • projected purchases, 136, 136t

      • projected yields, v, 53–54, 62

      • public debt projections and, 59, 67

      • purchases by depository corporations, 135f

      • risk implications of interest rate rise for bank holders of, 132–138, 137f, 144

      • source of low yields, v, 59

    • Government Pension Investment Fund, 81, 144, 145

    • Growth

      • Abenomics outcomes to date, 8, 30–32, 31f

      • Abenomics strategies to promote, 4–6

      • Abenomics targets for, 94

      • causes of recent lags in, v, 1, 91, 92–94

      • contributions to, 147, 148f

      • course of recovery from 1990s asset bubble, 14

      • economic agreements to promote, 103–104

      • effects of global financial crisis on, 93–94

      • effects of population aging on, 40–43, 41f, 47–48, 55

      • examples of sustained increases in, 94–96, 95f, 95t, 96f

      • female labor force participation and, 112

      • financial sector reforms to promote, 102–103

      • foreign labor force participation and, 97–100

      • future challenges for, v, 94, 147

      • international comparison, 92f

      • Japan’s potential rate, 92f, 94, 94t

      • labor participation and, 62–63

      • policies to counter effects of population aging on, 44

      • projected effects of Abenomics on, 45f, 46

      • recent patterns and trends, v, 1, 91–94, 92f

      • recent signs of recovery, 2

      • structural reforms to promote, 91, 96–97, 97f, 104–105

      • See also Inflation and growth expectations; Lost Decade

    H

    • Health and long-term care system

      • copayment rates, 84

      • demand for long-term care workers in, 99–100, 100f

      • patterns and trends, 55, 65–66, 72f, 73, 83

      • population aging implications for, 38, 51, 54, 66, 83

      • projected spending, 38, 51, 54, 66, 66f, 71, 83

      • reform options, 83–84

    • Honebuto no Hoshin, 56

    • Hong Kong, 165, 175

    • Household investment

      • asset allocations, 127f

      • in Lost Decade, 1

      • recent reforms to increase, 144

    • Household savings

      • patterns and trends, 42, 43t

      • population aging and, 42–43, 42t

    I

    • Immigration policy, 6, 86–87, 97–100, 98f, 108, 114, 123

    • Imports

      • Abenomics implementation and, 31f, 32

      • exchange rate and, 42, 172

      • services, 104

    • Indonesia, 143

    • Inflation

      • Abenomics outcomes for, 4, 8, 32–33, 33f, 36, 45f

      • Abenomics policy targets, 24, 26

      • in course of 1990s asset bubble, 13, 14

      • effects of monetary easing policies on, 19

      • effects of population aging on, 40–43, 41f, 47–48

      • interest rate linkage, 15–16, 60

      • mechanisms for transmission of population aging effects on, 37–40

      • recent patterns and trends, 12f

      • targets in policy responses to 1990s economic shocks, 15–16

      • wage rates and, 120

      • See also Deflation; Inflation and growth expectations

    • Inflation and growth expectations

      • Abenomics implementation and, 3, 4, 32, 33f, 125

      • central bank transparency and, 21–22, 23, 26–27

      • government bond yields and, 60

      • interest rates and, 15–16, 60

      • monetary easing and, 17, 19, 20, 25, 26, 32, 46

      • population aging and, 40, 44

      • private investment and, 154, 155, 158

      • wages and, 120–121

    • Initial public offerings, 130, 131f

    • Insurance industry

      • asset allocations, 128f, 136

      • cross-border activities, 168

    • Interest rates

      • corporate investment patterns and, 154

      • forward guidance from central bank on, 21–23

      • future challenges and opportunities for policymakers, v

      • global spillover effects of Abenomics and, 174

      • inflation linkage, 15–16, 60

      • policy responses to 1990s economic shocks, 14, 15–16

      • population aging and, 39, 40, 43, 60

      • projected effects of Abenomics on, 4, 45f, 60–61, 61f

      • public debt projections and, 59–65

      • recent patterns and trends, 14, 15f

      • risks for banks holding government bonds, 132–138, 137f, 144

    • Intergenerational equity issues, 69, 77, 84–87

    • Investment. See Corporate investment

    J

    • JPX Nikkei 400 index, 144, 161

    K

    • Koizumi administration, 56, 73

    L

    • Labor market

      • Abenomics effects to date, 32, 32f

      • Abenomics growth strategies, 6

      • employment in small- and medium-sized

      • enterprises, 150–151, 151f

      • employment patterns and trends, 108–109, 109f

      • employment protection policies, 116–117, 119f

      • female participation in, 97, 98f, 108, 112–114, 112f, 113f, 115, 115f, 117, 118f, 123

      • foreign worker participation in, 6, 86–87, 97–100, 98f, 108, 114, 123

      • future challenges and opportunities for policymakers, v–vi, 6, 107–108

      • global financial crisis effects in, 107

      • in health and long-term care sector, 99–100, 100f

      • income share, 110, 110f

      • increasing older worker participation in, 114–115, 123

      • international comparison of workforce participation, 98f

      • lifetime employment system, 107

      • nonregular workers in, 1, 6, 107, 111, 111f, 115–118, 115f, 123

      • population aging and, 37, 39–42, 47, 48, 108

      • potential growth gains from reform of, 94–96, 96f

      • potential inflationary outcomes of

      • reforms in, 108

      • projections, 62–63, 108

      • protections for part-time workers, 118–120

      • recent growth lags and, 93, 94

      • recommendations for reforms in, 123–124

      • reforms to promote growth, 96, 97–100

      • reforms to support Abenomics implementation, 108, 123, 124

      • sectoral variation in nonregular employment, 116, 116f

      • sectoral variation in unemployment, 109

      • sensitivity to output fluctuations, 109

      • severance pay system, 117

      • See also Wages and compensation

    • Land markets

      • in development of 1990s asset bubble, 13

      • population aging and, 37, 41f

      • projected effects of Abenomics on, 45f

    • Life expectancy, 36, 39, 72

    • Lost Decade

      • conditions leading to, 1, 11

      • growth outcomes of reform responses, 5, 51

      • lessons from monetary policy during, 14–16, 26–27

      • signs of recovery from, 2

    M

    • Manufacturing sector, 39–40, 93, 101f, 116f, 122f, 139f, 148, 149, 151f

    • Minimum wage, 121–123

    • Monetary policy

      • Abenomics strategies, 3–4, 8, 12–13, 24–26, 46

      • central bank communication and transparency of, 21

      • in development of 1990s asset bubble, 13

      • fiscal policy coordination with, 12, 23–24, 26

      • forward guidance in, 12, 21–23

      • lessons from Lost Decade experience, 14–16, 26–27

      • population aging considerations in, 48

      • recommendations for reforms in, vi

      • responses to 1990s asset bubble shock, 13–14

      • shortcomings of, in response to deflation, 2, 11–12, 26

      • transmission channels, 4, 12

    N

    • Netherlands, 95–96

    • New Zealand, 94, 95

    • Nonregular workers, 1, 6, 107, 111, 111f, 115–118, 115f, 123

    • Nuclear power, 2

    O

    • Organisation for Economic Co-Operation and Development, 73, 74f, 107

    P

    • Parental leave policies, 113–114

    • Pension system

      • asset allocations, 127f, 128f

      • contribution rate, 82, 86

      • contributions from dependent spouses, 82–83

      • effects of 2004 reforms, 65, 71

      • eligibility age, 81–82, 85–86

      • intergenerational equity issues, 85–86

      • macroeconomic indexing of benefits, 81

      • population aging and, 55, 65

      • recommendations for fiscal consolidation, 87–88

      • replacement ratio, 82, 85–86

      • share of social security spending, 72f, 73

      • spending, 55, 65, 80–81

      • tax treatment of benefits, 83, 86

      • transition to higher-risk investing, 145

    • Political economy, population aging and, 38, 39

    • Portfolio rebalancing

      • Abenomics outcomes in, 33–34, 34f

      • allocation to safe assets in recent past, 1, 127–128f

      • cross-border lending in, 138–143

      • global spillover effects of, 163, 173–174

      • goals of Abenomics, 7, 9, 51

      • monetary easing and, 25, 125

      • population aging and, 38, 47

      • risks of Abenomics, 143, 145–146

      • shift toward risk capital under Abenomics, 51, 125–132, 144–146

    • Productivity

      • capital, 152–153, 152f

      • growth prospects and, 94

      • growth rate and, 92–93

      • patterns and trends, 101, 101f

      • population aging and, 39–40

      • recent signs of recovery, 2

      • reducing labor market duality to increase, 115–116

      • research and development spending and, 153

      • sectoral differences, 101

      • strategies for promoting, 101–102

      • wage growth and, 109–110, 110f

    • Public debt

      • future prospects, 53, 67

      • gross and net, 57

      • population aging and, 38, 43–44, 51, 65–66

      • projected effects of Abenomics on, 45f, 69, 70f

      • recent patterns and trends, 4, 56, 58f, 67

      • reform strategy of Abenomics, 4, 5

      • spending patterns, 51

      • sustainability analysis, 53, 57–59, 63–65, 64f, 67

      • See also Debt-to-GDP ratio

    • Public spending

      • In Abenomics plan, 30, 31f

      • for earthquake reconstruction, 53, 54, 56

      • fiscal–monetary policy coordination

      • and, 24

      • growth rate and, 93

      • in health care system, 38, 51, 54, 65, 66, 66f, 71, 83

      • interest payments, 73

      • international comparison, 73, 74f

      • on pension system, 55, 65, 80–81

      • population aging and, 38, 51, 55, 65–66

      • projections, 71

      • recent patterns and trends, 72

      • tax increase versus, as fiscal consolidation strategy, 70–71

      • See also Public debt; Stimulus spending

    • Public works spending, 51, 55, 73

    Q

    • Quantitative and qualitative easing

      • Abenomics implementation, v, 3–4, 12–13, 24–26, 27, 29, 30, 36

      • composition of asset purchase programs, 20, 24–25, 25f, 26–27

      • effectiveness of policies in 2000s, 17–20, 18f, 21f

      • exit risks, 46–47, 49

      • forward guidance in, 21–23

      • global spillover effects of, 163

      • impact of Lost Decade policies, 12

      • implications of population aging for, 44

      • lessons from Lost Decade policies, 26–27

      • transmission channel components, 25

    R

    • Real estate investment trusts, 19

    • Regulatory regime

      • Abenomics growth strategies, 6

      • barriers to firm exit and entry, 130–132, 145

      • cross-border risk monitoring, 143

      • employment protection policies, 116–117, 118–120

      • growth-promoting reforms of, 96, 97

      • transition to higher risk environment in financial sector and, 6, 7

    • Research and development, 153

    • Retirement age, 114, 115

    • Risk environment

      • of Abenomics, 30, 143–144

      • cross-border lending by Japanese banks, 143

      • effects of monetary easing on, 20

      • exit from monetary easing policies and, 47

      • financial sector policies to ameliorate, 144–145

      • financial sector transition to higher, 6, 7, 102

      • global spillover effects from government bond shocks, 175

      • global spillover effects of Abenomics, 164–165

      • implications of interest rate rise for banks holding government bonds, 132–138, 137f

      • portfolio allocation toward higher, under Abenomics, 125–132

      • yen as safe-haven currency, 169–170

    S

    • Savings rate

      • consumption tax increase and, 76

      • population aging and, 42–43, 42t

      • projections, 53

      • recent reforms to increase, 144

      • trends, 120

    • Services sector, 6, 39–40, 101, 102, 104, 116f, 121, 122f, 149–150, 153

    • Singapore, 143, 165, 175

    • Small- and medium-sized enterprises, 111

      • bank lending to, 156f

      • credit access, 7, 130–131, 145, 156f

      • economic significance, 150–151

      • employment in, 150–151, 151f

      • financial policy reforms to support, 1, 02, 6, 159, 160

      • income and debt shifting by, 79–80

      • investment patterns, 149, 150f, 156

      • sluggish wage growth in, 111

    • Social security spending, 51, 55, 65, 71, 72, 72f, 73, 87, 136

    • Special economic zones, 101, 123

    • Stimulus spending, 4–5, 23–24, 29, 30, 54–55, 56, 67

    • Structural policies

      • Abenomics reform strategy for, 3, 5–6, 8

      • future challenges and opportunities, v–vi

      • population aging considerations in, 44, 48

      • to promote corporate investment, 159–161

      • to promote growth, 91, 96–97, 97f, 104–105

    • Supply-chain linkages, Japan’s, 163, 166–167, 174

    • Sustainability

      • of Abenomics outcomes to date, 8

      • challenges for Japan, v, 9

      • debt analysis, 53, 57–59, 63–65, 64f, 67

      • goals of Abenomics, 51

    • Sweden, 94, 95–96

    T

    • Tax policy

      • Abenomics strategies for, 5, 30

      • corporate rate, 6, 71, 77–80, 78f, 79f, 87, 96, 103, 103f, 158, 159

      • on dividend income, 103, 103f

      • female labor force participation and, 114

      • for fiscal consolidation, 70–71

      • international comparison of corporate rate, 77–78, 78f

      • outcomes of Abenomics reforms of, 8

      • reforms of 1990s, 55

      • revenue generation in Lost Decade, 54

      • revenue patterns and trends, 72–73, 73f

      • treatment of pension income, 83, 86

      • See also Consumption tax

    • Technological innovation, 153

    • Thailand, 143, 166

    • Trade. See Exports; Imports

    • Trade agreements, 6, 96, 103–104

    • Trans-Pacific Partnership, 6, 30, 104

    U

    • Unemployment insurance, 119, 119f

    • United Kingdom, 109, 111

    • United States, 91, 93, 109

      • foreign ownership of government bonds of, 168

      • forward guidance from central bank in, 21–22

      • Japan’s foreign direct investment in, 165

      • monetary easing policies, 19

      • policy effects on Japanese government bonds, 62

      • recovery from Great Depression in, 23

    V

    • Venture capital, 7, 130, 145, 159–160

    W

    • Wages and compensation

      • deflation effects on, 11, 120–121

      • educational attainment and, 123f

      • effects on inflation, 120

      • foreign labor force participation and, 99

      • international comparison, 122f

      • minimum rates, 121–123

      • nonregular workforce and, 111f

      • overtime payment, 119–120

      • patterns and trends, 109–110, 110f, 120

      • population aging effects on, 29, 38, 42, 48

      • recent signs of improvement in, 8

      • recommendations for reforms in, 124

      • reforms to support Abenomics implementation, 29, 108, 124

      • sectoral variation in, 122f

      • sources of slow growth in, 110–111, 120–121

      • unemployment insurance, 119, 119f

    • Women in workforce, 97, 98f, 108, 112–114, 112f, 113f, 115, 115f, 117, 118f, 123

    Z

    • Zero interest rate policy, 2, 14, 15, 17, 22–23

    • Zombie borrowers, 93, 102, 132

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