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Begin New Search Topic International Trade and Finance Political Geography Japan Content Type Policy Brief

1. ASEAN as an FDI Attractor: How Do Multinationals Look at ASEAN?

Author:
Masahito Ambashi
Publication Date:
01-2017
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This policy brief presents an overview of the ASEAN economy in terms of its economic relationship with multinationals, particularly Japanese companies, that have long invested in this region. ASEAN has been an attractor of foreign direct investment (FDI). Business interest in ASEAN has increased again recently due to the (i) relatively low wage of ASEAN compared to China, (ii) establishment of the ASEAN Economic Community (AEC), (iii) economic partnership network with a core of ASEAN countries, (iv) large-scale market covered by ASEAN, and (v) rise of CLMV countries (Cambodia, Lao PDR, Myanmar, and Viet Nam). In these trends, ASEAN has established a reciprocal economic relationship with other countries and regions. To develop its economy, ASEAN member states are expected to further advance the AEC at a high level. Hence, ASEAN must address challenges such as deepening further economic integration and narrowing development gaps in the region. Most importantly, ASEAN still needs to increase the attractiveness of its 'whole region' as an essential and integral part of global value chains to draw further FDI.
Topic:
Economics, International Political Economy, International Trade and Finance, and Global Political Economy
Political Geography:
Japan and Southeast Asia

2. How not to create zombie banks: lessons for Italy from Japan

Author:
Mark Hallerberg and Christopher Gandrud
Publication Date:
03-2017
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
Japan serves as a cautionary tale for Italy on how to clean up banking-sector problems. A general lesson is the need for policies to forthrightly address non-performing loans (NPLs) in countries with widespread banking problems. This helps address zombie banks and sluggish economic growth. The Japanese experience indicates that three elements are necessary to address NPLs: (a) sufficiently capitalised banks that can take losses from NPL write-downs; (b) an independent regulator that can identify problems and force action; and (c) tools to manage the orderly disposal of NPLs. The problem is not that this combination of policy tools is unknown, but that banks and governments lack incentives to use them in combination. Italy’s December 2016 package providing €20 billion for recapitalisation of banks is a step in the right direction. Similarly, pressure from the European Central Bank on Italian authori- ties and on banks to address NPLs is welcome. However, policy tools to manage and dispose of NPLs and, just as importantly, incentives to use them, are lacking. In January 2017, the European Banking Authority published a set of policy proposals for NPL resolution. Those include national and European-level public asset management companies (AMC), also known as ‘bad banks’. We argue that in Italy, the incentives to use such tools and dispose of NPLs have been weak.
Topic:
International Trade and Finance, Political Economy, Economic structure, and Global Political Economy
Political Geography:
Japan and Italy

3. Japan's New Security Policy: Breaking Away from the Post–War Regime?

Author:
Bart Gaens
Publication Date:
02-2014
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
China is challenging the regional balance of power in East Asia through a military buildup and an increasingly assertive foreign policy. The US is forced to find the right balance between cooperating with China while benefiting from its economic rise, and countering China's regional reach by carrying out its self-declared "pivot" to Asia in spite of domestic and budgetary constraints. With just over one year in office, Japan's Prime Minister Shinzo Abe has received wide domestic support for his ambitious plans to revive Japan's economy through his threefold policy of Abenomics. At the same time, however, he has implemented a number of significant policies in the defence and security sphere. In response to China's military rise, the Abe administration increased and recalibrated the defence budget. Furthermore, in order to reinforce the alliance with the US, the government approved the creation of a US-style National Security Council, passed a Secrecy Bill, and aims to reverse Japan's self-imposed ban on exercising the right to collective self-defence. Under the banner of "proactive pacifism", the Abe cabinet is seizing the momentum caused by the changing regional power dynamics in order to edge closer towards "breaking away from the postwar regime". A proposed revision of Japan's constitution, unchanged since 1947, symbolizes the ruling Liberal Democratic Party's (LDP) objective to bring about a more autonomous role for Japan both in the security alliance with the US and as an international actor.
Topic:
Security, Foreign Policy, Defense Policy, Arms Control and Proliferation, Economics, and International Trade and Finance
Political Geography:
Japan, China, and Asia

4. Global Trends of Multi-Factor Productivity

Author:
Jeong Yeon Lee
Publication Date:
03-2014
Content Type:
Policy Brief
Institution:
East-West Center
Abstract:
Multi-factor productivity (MFP) compares the growth of gross domestic product with the growth of combined capital and labor inputs. The growth rate of MFP assumes theoretical significance because it represents the slope of the steady-state growth path, and hence is a major determinant of the long-term growth trend. This paper offers the balanced panel of the estimated growth rates of MFP for 24 OECD countries over 1986-2011. Based on the estimates of MFP growth, a number of notable trends in productivity growth are identified for the entire OECD area as well as three major economies – the United States, the Eurozone and Japan – within the OECD.
Topic:
Economics, Industrial Policy, International Trade and Finance, and Labor Issues
Political Geography:
United States, Japan, and Europe

5. Estimates of Fundamental Equilibrium Exchange Rates, November 2014

Author:
William R. Cline
Publication Date:
11-2014
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
This semiannual review finds that most of the major international currencies, including the US dollar, euro, Japanese yen, UK pound sterling, and Chinese renminbi, remain close to their fundamental equilibrium exchange rates (FEERs). The new estimates find this result despite numerous significant exchange rate movements associated with increased volatility in international financial markets at the beginning of the fourth quarter of 2014, and despite a major reduction in the price of oil. The principal cases of exchange rate misalignment continue to be the undervalued currencies of Singapore, Taiwan, and to a lesser extent Sweden and Switzerland, and the overvalued currencies of Turkey, New Zealand, South Africa, and to a lesser extent Australia and Brazil. Even so, the medium-term current account deficit for the United States is already at the outer limit in the FEERs methodology (3 percent of GDP), and if the combination of intensified quantitative easing in Japan and the euro area with the end to quantitative easing in the United States were to cause sizable further appreciation of the dollar, an excessive US imbalance could begin to emerge.
Topic:
Economics, Foreign Exchange, International Trade and Finance, and Monetary Policy
Political Geography:
Africa, United States, Japan, Turkey, South Africa, Brazil, and New Zealand

6. Launching the third arrow of Abenomics

Publication Date:
06-2013
Content Type:
Policy Brief
Institution:
Oxford Economics
Abstract:
Shinzo Abe was elected Prime Minister of Japan last December on a programme intended to end two decades of deflation and lost growth in Japan. His regime, dubbed 'Abenomics', consists of three arrows: a monetary stimulus, a fiscal stimulus and structural reform. The first two are well under way. The third has yet to be fired. But following his party's victory in July's Upper House election, Mr Abe has all the backing he will need – or ever get – to forcefully launch the third arrow of Abenomics. This scenario alert examines the potential upsides for the Japanese economy if Abenomics succeeds. Although the economy will not return to the 4%+ growth rates seen in the 1980s, it could secure growth in the 2-3% range. This would be a major improvement on its dismal performance of less than 1% average real growth a year since 1993.
Topic:
Economics, International Trade and Finance, Markets, Monetary Policy, and Reform
Political Geography:
Japan and Syria

7. The Role of Europe in Enhancing Cooperative Security in Asia and the Pacific: A View from Japan

Author:
Takako Ueta
Publication Date:
10-2013
Content Type:
Policy Brief
Institution:
EGMONT - The Royal Institute for International Relations
Abstract:
Asia is a prominent export market for Europe while in the East and South China Seas, tensions continue. Europe has searched for its political role in Asia. This policy brief presents an analysis and argues the role of Europe in enhancing cooperative security in Asia and the Pacific, which would promote stability and peace there.
Topic:
Security, Emerging Markets, International Cooperation, and International Trade and Finance
Political Geography:
Japan, Europe, Israel, and Asia

8. Stabilizing Properties of Flexible Exchange Rates: Evidence from the Global Financial Crisis

Author:
Joseph E. Gagnon
Publication Date:
11-2013
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
There is a long-standing debate among economists and policymakers on the benefits of flexible versus fixed exchange rates (Klein and Shambaugh 2010). In principle, flexible exchange rates allow a country's central bank to focus on stabilizing economic growth and inflation, which are the ultimate goals of monetary policy. However, some argue that in practice central banks often do not use their powers wisely and it may be better to restrict their freedom by requiring them to peg their currency to that of an important trading partner. Others note that flexible exchange rates are far more volatile than fundamental factors can explain (Flood and Rose 1995), raising the possibility that they may introduce wasteful cross-sectoral fluctuations in economic activity. One common viewpoint is that flexible exchange rates may be fine for large countries but that the smallest countries are better off with fixed exchange rates (Åslund 2010).
Topic:
Economics, Foreign Exchange, International Trade and Finance, Markets, and Financial Crisis
Political Geography:
United States, Japan, China, and United Kingdom

9. Japan Post: Anti-Reform Law Clouds Japan's Entry to the Trans-Pacific Partnership

Author:
Gary Clyde Hufbauer and Julia Muir
Publication Date:
05-2012
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Our last policy brief on this long-running saga recounted political machinations, late in 2011, to reverse the Koizumi era reforms of Japan Post, a giant among state-owned enterprises (SOEs). As a brief background: Japan Post is a conglomerate of five companies: the parent, Japan Post Holdings; two subsidiaries concerned with operating post offices and delivering mail, namely Japan Post Network and Japan Post Services; and two giant financial arms, Japan Post Bank and Japan Post Insurance.
Topic:
Economics, International Trade and Finance, Treaties and Agreements, and Law
Political Geography:
Japan and Israel

10. Another Shot at Protection by Stealth: Using the Tax Law to Penalize Foreign Insurance Companies

Author:
Gary Clyde Hufbauer
Publication Date:
01-2012
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The United States suffers from a severe self-inflicted wound. Together, federal and state governments impose almost the highest corporate tax rate found among advanced countries, 39 percent. Only Japan is fractionally higher. The high US rate has adverse consequences—lost investment, lost jobs, and less innovation—and goes a long way to explain slipping US competitiveness in the world economy.
Topic:
Economics, Industrial Policy, International Trade and Finance, and Markets
Political Geography:
United States and Japan

11. Japan Post: Retreat or Advance?

Author:
Gary Clyde Hufbauer and Julia Muir
Publication Date:
01-2012
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Legislation to reform Japan Post is again gathering steam in Tokyo. The real question is whether the latest act in this long- running drama will represent true reform or in fact will camouflage an entrenchment of Japan Post's formidable monopoly powers. Antireform proposals being lined up for consideration in the Diet would indefinitely extend effective government control of Japan Post's financial arms (thereby reversing the Koizumi era reforms). On the other hand, reform forces in the Japanese government want new legislation to guarantee a level playing field in banking and insurance between Japan Post and private firms, whether domestic or foreign.
Topic:
Economics, Government, International Trade and Finance, and Natural Disasters
Political Geography:
Japan and Israel

12. Rising Tensions Over China's Monopoly on Rare Earths?

Author:
Jane Nakano
Publication Date:
05-2012
Content Type:
Policy Brief
Institution:
East-West Center
Abstract:
The United States, Japan, and the European Union—the three key consumers of Chinese rare earth materials—formally complained to the World Trade Organization (WTO) in March about Chinese restrictions on its rare earth exports. Several weeks later, China announced the establishment of a 150-plus member association with the official aim of promoting sustainable development within this sector. Some analysts wonder if this is part of a Chinese plan to circumvent international complaints by instituting an oligopolistic arrangement to control its rare earth exports. Others ask if this could be another step in an escalating dispute with China over the global supply of rare earth materials.
Topic:
International Relations, Development, International Trade and Finance, Markets, and Natural Resources
Political Geography:
United States, Japan, China, and Europe

13. Getting Surplus Countries to Adjust

Author:
John Williamson
Publication Date:
01-2011
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The world has witnessed two distinct attempts to build a multilateral mechanism to discipline surplus countries that declined to adjust their surpluses, and several proposals are currently on the table to do the same. On the two previous occasions the major surplus country of the day defeated attempts to create such a mechanism, and today China (not to mention Japan or Germany) exhibits no enthusiasm for the idea. Despite the importance of the issue, there has been remarkably little discussion of these proposals.
Topic:
Economics, International Trade and Finance, International Monetary Fund, and Monetary Policy
Political Geography:
Japan, China, and Germany

14. Are the advanced economies facing a lost decade?

Publication Date:
07-2011
Content Type:
Policy Brief
Institution:
Oxford Economics
Abstract:
Recent weeks have seen a slew of weaker-than-expected data releases from the major economies, raising doubts about whether the expansion in the developed nations is sustainable. One reason for the apparent loss of momentum has been the moderation of growth in the emerging markets, as central banks have tightened monetary policy in response to rising inflation. The weakening trend in growth indicators can also be linked to temporary adverse factors, including supply chain disruptions form the Japanese earthquake and tsunami, as well as the sharp rise in oil prices earlier this year.
Topic:
Economics, Globalization, International Trade and Finance, and Financial Crisis
Political Geography:
Japan

15. From the FDI Triad to multiple FDI poles?

Author:
Karl P. Sauvant and Persephone Economou
Publication Date:
07-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Twenty years ago, in the inaugural issue of the World Investment Report, the United Nations highlighted a shift in the global pattern of foreign direct investment (FDI) from bipolar, dominated by the United States and the European Community, to tri-polar (the FDI Triad), dominated by the European Community, the United States and Japan.
Topic:
Economics, International Trade and Finance, United Nations, and Foreign Direct Investment
Political Geography:
United States, Japan, and Europe

16. Security developments in East Asia: what implications for the EU?

Author:
Nicola Casarini
Publication Date:
02-2011
Content Type:
Policy Brief
Institution:
European Union Institute for Security Studies
Abstract:
East Asia is home to some of the most important trading partners of the Union. China is foremost among these, ranking second only to the US - in 2009, EU-China trade totalled a massive €296 billion - while the EU is China's most important trading partner. Japan is the sixth-largest trade partner of the EU - in 2009, EU-Japan trade was almost €92 billion. South Korea is the EU's eighth-largest trade partner and the EU has become South Korea's second largest export destination - total trade in 2009 was above €53 billion. Furthermore, on 6 October 2010 the EU and South Korea signed a Free Trade Agreement (FTA) which is the most ambitious bilateral trade agreement ever negotiated by the EU, and the first with an Asian country.
Topic:
International Trade and Finance
Political Geography:
Japan, China, Europe, Israel, Asia, and South Korea

17. The Economic Consequences of Shifting Away From Nuclear Energy

Author:
Ken Itakura
Publication Date:
12-2011
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
In the aftermath of the devastating nuclear fallout in Japan, there has been a harsh debate surrounding the role of nuclear energy in electricity generation. A changing role will have economic consequences on production, consumption, and international trade. To quantity these effects, we implemented simulations with a global CGE model and database. The simulation results show that reductions in the use of nuclear for electric power generation may have profound negative impacts on the Japanese economy. A nuclear accident at the Fukushima power plant changed the future direction of Japanese energy policy as well as Asian energy policy. These policies are integrated via technological, financial, and nuclear energy knowledge sharing activities within the region. The main objective of this policy brief is to shed some light on the following question: what would be the economic consequences of altering the source of power generation from nuclear to fossil fuels? This Japanese case study offers policy implications for both Japan and the region as a whole.
Topic:
Economics, Energy Policy, International Trade and Finance, Economy, and Nuclear Energy
Political Geography:
Japan and Asia

18. Capital flows, the carry trade and 'sand in the wheels'

Author:
Stephen Grenville
Publication Date:
02-2010
Content Type:
Policy Brief
Institution:
Lowy Institute for International Policy
Abstract:
The 'carry trade', in which capital shifts from countries with low interest rates to countries with significantly higher rates, has become an important element of international capital flows over the past decade. With low interest rates in the United States, Japan, the UK and much of the rest of Europe expected to persist for some time, these flows seem likely to become larger in the aftermath of the Global Financial Crisis. Particularly for the emerging countries with shallow financial markets, interest-sensitive inflows have the potential to be disruptive. Exchange rates will tend to be overvalued for sustained periods, punctuated by sharp depreciations. These distorted and varying price signals will be unhelpful for good policy-making and steady economic growth.
Topic:
Emerging Markets, Globalization, International Trade and Finance, Foreign Direct Investment, and Financial Crisis
Political Geography:
United States, Japan, United Kingdom, and Europe

19. The Future of the Chiang Mai Initiative: An Asian Monetary Fund?

Author:
C. Randall Henning
Publication Date:
02-2009
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
In September 1997, at the outset of the last global financial crisis, the Japanese Ministry of Finance proposed the creation of an Asian Monetary Fund. Although this particular proposal was scuttled, the idea of a common regional fund on which East Asian governments might draw in times of financial turmoil survives. The region's disaffection from the International Monetary Fund (IMF), stemming from the 1997–98 crisis, sustains this idea and a desire on the part of individual countries to self-insure with large holdings of foreign exchange reserves. East Asian governments and central banks have created a set of bilateral swap arrangements (BSAs) dubbed the Chiang Mai Initiative (CMI) and are negotiating among themselves to build these BSAs into a more comprehensive facility. Some Asian officials hope that such a facility could underpin exchange rate cooperation and monetary integration in the region, although such proposals remain for the moment long-term visions.
Topic:
Economics, International Cooperation, International Trade and Finance, Regional Cooperation, and Financial Crisis
Political Geography:
Japan, Israel, and Asia

20. How Do We Know This is Not Another Great Depression? Lessons for Policymakers from the 1930s

Author:
Jeffrey Frankel
Publication Date:
07-2009
Content Type:
Policy Brief
Institution:
Belfer Center for Science and International Affairs, Harvard University
Abstract:
The current economic crisis is fundamentally different from those we have experienced in recent past. The proximate causes of previous recessions (1980-2 and 1990-91) were increases in interest rates in response to inflation. This time around, however, low interest rates and loose monetary policy during the period 2003-2005 had contributed to a bubble in asset prices, rather than to inflation. This-coupled with an underestimation of risk in our financial system, failures of corporate governance, and excessive debt by both households and government-caused the crisis of 2007-09.
Topic:
Economics, International Trade and Finance, Monetary Policy, and Financial Crisis
Political Geography:
United States, Japan, and Germany