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N° 183 |
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| October 1999 |
| Is the Japanese Crisis
Over? |
| Stéphanie Guichard |
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| The good performance of the Japanese economy
during the first half of 1999 was better than expected. But, it may only be tempo-rary.
The present rebound is being led by an acceleration of household spending which
appears to be very fragile. Furthermore, it has rapidly led to a rise in the yen
that risks undermining continued growth. The room for manoeuvre of fiscal policy
has been largely used up. At the same time, the Bank of Japan eschews any further
relaxation of monetary policy. Yet the obstacles to growth are more fundamental.
The Japanese model has not yet completed the transformation that would allow it
to return to higher growth. The crisis and subsequent reforms of the banking system
illustrate well Japan's present weakness, its problems of adaptation and the nature
of the costs the transformation entails. |
Abstract |
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