Will the Sun Still Rise?

The scale of the earthquake and tsunami that struck Japan in March was far greater than even the authorities’ worst nightmare scenarios foresaw. But Japan's crisis is also a rare opportunity to undertake the comprehensive reforms that have been postponed for too long.

TOKYO – The scale of the earthquake and tsunami that struck Japan in March was far greater than even the authorities’ worst scenarios foresaw. Nearly six months later, the total damage remains difficult to estimate. Social unrest and confusion, as well as radiation leaks from the Fukushima nuclear power plant, continue.

And now the country has absorbed another huge blow: another downgrade of its bond ratings. Both Moody’s and Standard & Poor’s now rate Japanese bonds at only their fourth-highest level.

So what policies should be implemented in response to these economic blows?

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