Betting on the Tortoise in Japan
Many countries today require easy fiscal policy, together with plans to achieve fiscal rectitude in the long run. Given this, governments should provide specific fiscal-consolidation mechanisms that are visibly likely to take effect when the time comes.
CAMBRIDGE – In April 2014, Japan’s consumption-tax rate is set to rise from 5% to 8% in an effort to address the long-term problem of high public debt. But will the resulting loss in purchasing power bring an end to the Japanese economy’s fragile recovery, as many fear?