Is Japan Set to Boom?
John H. Makin | Is Japan Set to Boom?
March 05, 2012

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"Engineering a successful transition out of deflation is one of the most challenging aspects of monetary policy, but the Bank of Japan just might be able to do it this time." – John Makin, AEI

In his March Economic Outlook, American Enterprise Institute (AEI) economist John Makin examines the recent shift in Japanese monetary policy and answers the question: is Japan set to boom?

Makin finds that:

  • Japan has suffered two "lost decades" of stagnant growth, but new quantitative easing by the Bank of Japan may finally resuscitate the country’s economy.
  • Though stimulating the economy by expanding the money supply is not an ideal course, if Japan allows deflation to persist, its massive debt burden will grow as its economy shrinks and its currency depreciates.
  • Japan's experiment could provide lessons on the effects of quantitative easing for other nations and may offset weak outlooks in the United States and Europe.


John Makin is a former consultant to the US Treasury Department, the Congressional Budget Office, and the International Monetary Fund. He is available for interviews and can be reached at jmakin@aei.org or through his research assistant daniel.hanson@aei.org.

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About the Author

 

John H.
Makin

  • John H. Makin is a resident scholar at the American Enterprise Institute (AEI), where he studies the US economy, monetary policy, financial markets, corporate taxation, and banking. He also studies and writes frequently about Japanese, Chinese, and European economic issues.


    Makin has served as a consultant to the US Department of the Treasury, the Congressional Budget Office, and the International Monetary Fund. He also spent 20 years on Wall Street as the chief economist, and later a principal, of Caxton Associates, a trading and investment firm. Earlier, Makin taught economics at various universities, including the University of Virginia. He has also been a scholar at the Bank of Japan, the Federal Reserve Bank of San Francisco, the Federal Bank of Chicago, and the National Bureau of Economic Research. A prolific writer, Makin is the author of numerous books and articles on financial, monetary, and fiscal policy. Makin also writes AEI's monthly Economic Outlook, which pairs insightful research with current economic topics.


    Makin received a Ph.D. and M.A. in economics from the University of Chicago, and he received a B.A. in economics from Trinity College.

  • Phone: 202-862-5828
    Email: jmakin@aei.org

  • Assistant Info

    Name: Daniel Hanson
    Phone: 202-862-5883
    Email: daniel.hanson@aei.org
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