While most of the world’s economies come to terms with the massive crash of the international finance system, Japan instead finds itself in a familiar situation. The world’s second-largest economy had just pulled itself out of fifteen years of stagnant growth when the global financial crisis hit, and its central bank had tried almost everything just to achieve that aim.
With the global crisis worsening, some members of Japan’s ruling Liberal Democratic Party – having lost confidence in the Bank of Japan – have suggested the government print its own money from its vast reserves. Professor R. Taggart Murphy of Japan’s University of Tsukuba is the author of Japan’s Policy Trap: Dollars, Deflation, and the Crisis of Japanese Finance. He says that while the Bank of Japan is not viewed favourably in some circles, the idea of the government releasing a second currency sounds like desperation.
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Talent: Professor R. Taggart Murphy, author of Japan’s Policy Trap: Dollars, Deflation, and the Crisis of Japanese Finance from the University of Tsukuba.
