In a sign of how worried it is about Japan's economy, the International Monetary Fund is urging the country to resurrect a radical strategy once employed by former U.S. presidents Nixon, Ford and Carter — only in reverse.
It is called an incomes policy, and it involves the kind of direct government intervention in the setting of wages that many economists now abhor.
But rather than employing it to try to contain salary and price pressures — as U.S. leaders did in the 1970s — the IMF wants Japan to use moral suasion, tax breaks and, as a last resort, penalties to prod companies into granting bigger pay gains and thus promote higher inflation.