{"id":49840,"date":"2019-11-28T08:50:47","date_gmt":"2019-11-28T13:50:47","guid":{"rendered":"https:\/\/olduvai.ca\/?p=49840"},"modified":"2019-11-28T08:50:49","modified_gmt":"2019-11-28T13:50:49","slug":"the-lessons-from-japans-monetary-experiment","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=49840","title":{"rendered":"The Lessons From Japan’s Monetary Experiment"},"content":{"rendered":"\n

The Lessons From Japan’s Monetary Experiment<\/a><\/h3>\n\n\n\n

A recent article in the Financial Times, \u201cAbenomics provides a lesson for the rich world<\/a>\u201c, mentioned that the experiment started by prime minister Shinzo Abe<\/strong> in the early 2010s should serve as an important warning for rich countries. Unfortunately, the article\u2019s \u201clessons\u201d were rather disappointing. <\/strong>These were mainly that the central bank can do a lot more than the ECB<\/strong> and the Fed <\/strong>are doing, and that Japan is not doing so badly. I disagree.<\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

<\/a>The failure of Abenomics has been phenomenal.\u00a0<\/strong>The balance sheet of the central bank of Japan has ballooned to more than 100% of the country\u2019s GDP, the central bank owns almost 70% of the country\u2019s ETFs and is one of the top 10 shareholders in the majority of the largest companies of the Nikkei index. Government debt to GDP has swelled to 236%, and despite the record-low cost of debt, the government spends almost 22% of the budget on interest expenses. All of this to achieve what?<\/p>\n\n\n\n

None of the results that were expected from the massive monetary experiment, inventively called QQE (quantitative and qualitative easing) have been achieved, even remotely. <\/strong>Growth is expected to be one of the weakest in the world in 2020, according to the IMF, and the country has consistently missed both its inflation and economic growth targets, while the balance sheet of the central banks and the country\u2019s debt soared.<\/p>\n\n\n\n

Real wages have been stagnant for years, and economic activity continues to be as poor as it was in the previous two decades of constant stimulus.<\/p>\n\n\n\n

The main lessons that global economies should learn from Japan are the following:<\/strong><\/p>\n\n\n\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

The Lessons From Japan’s Monetary Experiment A recent article in the Financial Times, \u201cAbenomics provides a lesson for the rich world\u201c, mentioned that the experiment started by prime minister Shinzo Abe in the early 2010s should serve as an important warning for rich countries. Unfortunately, the article\u2019s \u201clessons\u201d were rather disappointing. These were mainly that the central bank can […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1265,85,16957,303,8262,534],"class_list":["post-49840","post","type-post","status-publish","format-standard","hentry","category-economics","tag-abenomics","tag-boj","tag-daniel-lacalle","tag-fed","tag-financial-times","tag-monetary-policy"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/49840","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=49840"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/49840\/revisions"}],"predecessor-version":[{"id":49841,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/49840\/revisions\/49841"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=49840"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=49840"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=49840"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}