Public lecture - Why Did Japan Stop Growing? Professor Takeo Hoshi (Stanford University)

This public lecture is based on Professor Takeo Hoshi's NIRA reports with Anil Kashyap in 2011 and 2012. Professor Takeo Hoshi argues that Japan's stagnation in the last 20 years was a result of the failure to respond to the new challenges that started to emerge in the 1970s (i) end of catching up process, (ii) limit of export led growth in the post Breton Woods system, and (iii) rapid aging. In addition, Japanese government and the BOJ made mistakes of (i) not addressing the non-performing loans problem sooner, (ii) expanding fiscal expenditure too much and on wasteful investments, and (iii) keeping the monetary policy too tight to allow deflation. Japan needs more than expansionary macroeconomic policy to restore the growth. Professor Hoshi suggests nine policies in three policy areas that can be implemented to help Japan grow again: (1) deregulation, (2) opening up the country to the rest of the world, and (3) improving macroeconomic policy. The deregulation includes reforms to reduce the cost of doing business, stopping protection of zombie firms, deregulation especially in non-manufacturing, and growth enhancing special zones. Opening up policy includes trade opening including the participation in TPP, agricultural reform, and more open immigration policy. Improving macroeconomic policy includes the commitment to fiscal consolidation in the long run and more aggressive monetary policy. He will end the talk by evaluating Abenomics using the framework that was developed for the NIRA reports. The contents of those reports have been published as a book in Japanese last month from Nihon Keizai Shimbun Shuppansha.

Takeo Hoshi is Henri and Tomoye Takahashi Senior Fellow at the Walter H. Shorenstein Asia-Pacific Research Centre at Stanford University and Professor of Finance at Stanford Graduate School of Business. Before he joined Stanford University in 2012, he was Pacific Economic Cooperation Professor in International Economic Relations at the Graduate School of International Relations and Pacific Studies (IR/PS) at University of California, San Diego (UCSD), where he conducted research and taught on the Japanese economy for 24 years. He is also Research Associate at the National Bureau of Economic Research (NBER) and at the Tokyo Centre for Economic Research (TCER).

This is a public lecture and will be followed by a reception in the JG Crawford building.

Please RSVP at by 27 March 2013.

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