Japan Isn't Doomed

TOKYO/STOCKHOLM: Pessimism about Japan is easy and pervasive nowadays. Its financial crisis drags on, growth is nil, unemployment rises, and, recently, deflation appeared. Is there any way out?

For a Swede, Japan's economic problems are a form of déjŕ vu. In 1992, Swedes accepted that their "Swedish Model" didn't work. This was hard to understand, because everything had gone so well in Sweden for so long. With an economy falling apart and a bankrupt financial sector, radical reforms were needed. Change began in banking.

Sweden's experience suggests that Japan's most urgent problem is its financial crisis. As in Sweden 8 years ago, there is too much bad debt and too many banks. Insolvency in the financial sector spills into other sectors in the form of a credit crunch, because Japanese banks are unwilling to lend money.

To continue reading, please log in or enter your email address.

To access our archive, please log in or register now and read two articles from our archive every month for free. For unlimited access to our archive, as well as to the unrivaled analysis of PS On Point, subscribe now.

required

By proceeding, you agree to our Terms of Service and Privacy Policy, which describes the personal data we collect and how we use it.

Log in

http://prosyn.org/80u22Ul;

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated cookie policy and privacy policy.