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Policies and Prospects in Japan and the Implications for the Asia-Pacific Region
Author:
Mr. Tim Callen
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Warwick J. McKibbin null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2001: Issue 131
Language:
English
Publication Date:
01 Sep 2001
DOI:
https://doi.org/10.5089/9781451855289.001
ISBN:
9781451855289
ISSN:
1018-5941
Pages:
57
Keywords:
WP; Japan; real GDP; price; real interest rate; Asia-Pacific region; macroeconomic model; yen depreciation; equity price; role Japan; BoJ purchase; price effect; imports of machinery; depreciation of the yen; foreign direct investment; Real interest rates; Exports; Fiscal consolidation; Imports; Asia and Pacific; Europe
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper uses the G-Cubed (Asia-Pacific) model-a macroeconomic model with rich cross-country links-to explore the implications for Japan and Asia of several shocks to the Japanese economy. The results suggest that, while fiscal consolidation in Japan would initially dampen domestic growth, over the medium term the impact on both the domestic and regional economies would be positive. Quantitative monetary easing in Japan would boost domestic activity in the short-run, while being basically neutral for the region. Finally, a loss of confidence in the yen would be negative for Japan, but positive for the region because of a reallocation of capital flows toward non-Japan Asia.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund