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112. Global Economic Prospects: Slower But Still Solid Growth in 2005; Worries About Growth and Inflation for 2006
- Author:
- Michael Mussa
- Publication Date:
- 04-2005
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- After surging to the highest growth rate in a generation, world real GDP is set to slow from a rate of just over 5 percent for 2004 to about 4 percent for 2005 and a tad slower for 2006. The economic slowdowns in several important economies in the second half of last year, including much of continental Europe and Japan, already make it clear that year-over-year growth will slow for 2005. But the continued strong growth of domestic demand in other countries, most notably the United States and China, virtually assures that global growth this year will not fall below potential.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- United States, Japan, China, Europe, Israel, and East Asia
113. Japan Moves toward Sustainable Recovery
- Author:
- John H. Makin
- Publication Date:
- 10-2005
- Content Type:
- Policy Brief
- Institution:
- American Enterprise Institute for Public Policy Research
- Abstract:
- Japan's stock market, one of the world's strongest this year, is up about 20 percent since spring. It is doing remarkably well for a country whose nominal GDP is still below its 1997 level. By contrast, the U.S. stock market has been drifting lower all year. The S 500 Index is down about 4 percent in the last five months, even more when the highflying energy sector is excluded. This is the case despite U.S. nominal GDP having grown by a cumulative 46 percent since 1997. Clearly, stock markets are looking ahead and seeing a brighter future for Japan than for the United States.
- Topic:
- International Relations, Development, and Economics
- Political Geography:
- United States, Japan, Israel, and East Asia
114. Slower Growth
- Author:
- John H. Makin
- Publication Date:
- 02-2005
- Content Type:
- Policy Brief
- Institution:
- American Enterprise Institute for Public Policy Research
- Abstract:
- The average forecast for 2005 U.S. growth is 3.5 percent, with some prognosticators hoping for 4 percent. This forecast is predicated upon the assumption that the economy is on a sustainable expansion path, where consumption will be supported by steady growth of employment and household incomes. The 3.5 percent growth forecast for 2005 is identical to the mean growth rate of the U.S. economy since 1947. However, there is good reason to believe that the consensus forecast is too high. This possibility has important consequences because U.S. growth must be sustained at least at average levels to avoid a sharp drop in global growth. There are no signs of higher growth in Europe and Asia. Growth in Japan is looking weaker, while Chinese growth is moderating.
- Topic:
- Economics, International Trade and Finance, and Political Economy
- Political Geography:
- United States, Japan, China, Europe, and Asia
115. Election Watch: Japan — Japan's party system: shifting the political axis, releasing economic reform
- Author:
- Malcolm Cook
- Publication Date:
- 02-2004
- Content Type:
- Policy Brief
- Institution:
- Lowy Institute for International Policy
- Abstract:
- Changes in Japan's party system offer new hope for Japan's long-delayed economic reform as the axis of voting power accelerated its shift to the urban areas. The upcoming Upper House1 elections will provide another opportunity to see how far these changes have come and how permanent they are. The Liberal Democratic Party (LDP) has dominated post-war Japanese politics due to the party's overwhelming support in Japan's declining rural areas. The LDP's iron grip on the rural vote has created and been maintained by a nexus of interests between LDP politicians, favoured construction companies and rural voters. This rural public works "glue" has been one of the main reasons the Japanese government has been unable to address its drastically declining fiscal position. The political power of Japan's small farming sector also explains why Japan's bilateral and multilateral free trade diplomacy has not progressed. The November 9 Lower House election results and the rise of a real alternative to the LDP promise to help Prime Minister Koizumi's three-year fight to "modernise" the LDP and make it more appealing to urban and younger voters. November 9's results also suggest that if Koizumi loses this intra-LDP battle, then in the next Lower House elections the LDP will lose. So whether Koizumi is successful or not, economic reform chances in Japan have been boosted. Australia's largest trading partner is better placed for free trade talks bilaterally and globally and to address its worrying fiscal situation, the largest threat looming over Japan's future prosperity.
- Topic:
- Development, Economics, and Politics
- Political Geography:
- Japan, Israel, East Asia, and Australia
116. Doubling the Global Work Force: The Challenge of Integrating China, India, and the Former Soviet Bloc into the World Economy
- Author:
- Richard B. Freeman
- Publication Date:
- 11-2004
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- In 1985, the global economic world (N. America, S. America, Western Europe, Japan, Asian Tigers, Africa) consisted of 2.5 billion people. In 2000 as a result of the collapse of communism, India's turn from autarky, China's shift to market capitalism, global economy encompassed 6 billion people. Had China, India, and the former Soviet empire stayed outside, global economy would have had 3.3 billion.
- Topic:
- International Relations, Economics, and Government
- Political Geography:
- Africa, Japan, China, America, India, Asia, and Western Europe
117. What Went Right in Japan
- Author:
- Adam S. Posen
- Publication Date:
- 09-2004
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Japan's recovery is strong. Real GDP growth will exceed 4 percent this year and likely be 3 percent or higher in 2005 and perhaps even 2006. The Japanese economy has been growing solidly for the last five quarters (average real 3.2 percent annualized rate), and the pace is sustainable, given Japan's underlying potential growth rate (which has risen to 2 to 2.5 percent per year) and the combination of catch-up growth closing the current output gap and some reforms that will raise the growth rate for quarters to come (though not permanently). Indicators of domestic demand beyond capital investment are increasingly positive, including housing starts bottoming out, inventories drawing down, and diminished deflation. Moreover, on the external side, while China was the main source of export growth in 2003, the composition of exports has become more balanced this year and is widening beyond that seen in other recoveries. Just as in the United States and other developed economies, a sharp slowdown in Chinese growth and a sustained further increase in energy prices represent the primary risks to the outlook.
- Topic:
- Development and Economics
- Political Geography:
- United States, Japan, China, Israel, East Asia, and Asia
118. Does venture capital investment spur employment growth?
- Author:
- Ansgar Belke, Rainer Fehn, and Neil Foster
- Publication Date:
- 12-2003
- Content Type:
- Working Paper
- Institution:
- Centre for European Policy Studies
- Abstract:
- Anglo-Saxon countries have been successful in the 1990s concerning labour market performance compared to the former role models of Germany and Japan. This reversal in relative economic performance might be related to idiosyncracies in financial markets, with bank-based financial markets as in Germany and Japan being possibly inferior to stock-market based financial markets in turbulent times and when approaching the economic frontier. A cleavage is related to venture capital markets which are flourishing in Anglo-Saxon but not in German-type financial markets. Venture capital is crucial for financing structural change, new firms and innovations and therefore possibly also nowadays for employment growth.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- Japan, Europe, and Germany
119. Japanese Economic Stagnation: Still in Neutral
- Author:
- Edward Lincoln
- Publication Date:
- 04-2003
- Content Type:
- Working Paper
- Institution:
- The Brookings Institution
- Abstract:
- One of the discouraging problems in Northeast Asia over the past decade has been the lengthy malaise in the Japanese economy and the inability of government, business, and the public to forge effective solutions. In the decade since 1992, the average annual real (inflation-adjusted) economic growth rate has been only one percent—positive but very low and punctuated by four recessions in which gross domestic product (GDP) fell for at least two consecutive quarters. The financial sector is weighed down under an enormous amount of non-performing loans that has only grown larger over time. Meanwhile, Japan has become the first industrial country since the 1930s to experience deflation—a decline in the overall price level.
- Topic:
- Economics, International Political Economy, and International Trade and Finance
- Political Geography:
- Japan, Asia, and Northeast Asia
120. Loans to Japanese Borrowers
- Author:
- David C. Smith
- Publication Date:
- 07-2003
- Content Type:
- Working Paper
- Institution:
- Board of Governors of the Federal Reserve System
- Abstract:
- This paper examines the characteristics of loans to Japanese borrowers using a relatively unexplored, contract-specific data set. I find that Japanese banks charge less on loans to Japanese borrowers than do foreign banks, holding constant many of the risk characteristics of the borrower. Moreover, Japanese banks vary pricing less across these risks than do foreign banks, suggesting that Japanese banks tend not to distinguish good risks from bad. Taken together, the results suggest that problems at Japanese banks stem from the behavior of the banks themselves, not simply from poor economic conditions. I also document a significant shortening in the maturity structure of Japanese loans in the late 1990s.
- Topic:
- Economics, Emerging Markets, and International Trade and Finance
- Political Geography:
- Japan and Israel