In the 1980s and 1990s, people were acutely aware of inflationary risks, whereas economic actors today may be setting their expectations based on a different set of considerations.
For Koichi Hamada's latest contributions to The Japan Times, see below:
It's unwise to burden a battered economy with higher taxes.
US President Donald Trump's trade war with China is driven at least as much by anxiety over China's rise as by economic rationality. That kind of insecurity can have disastrous consequences.
Japan's experience doesn't prove that Modern Monetary Theory works, as some have argued. But increasing deficit-financed spending, in Japan and elsewhere, may still have merit, despite inflationary risks.
We need trade competition among economic agents but cooperation among governments
Many warn that the stimulus potential is depleted, particularly in Japan, with its negative short-term interest rate.
The U.S.-China trade war may lead to broader damage, as tit-for-tat tariffs reduce overall exports, undermine total global trade flows and impede world economic growth.
While some advocate introducing daylight savings time in Japan to save energy and extend outdoor time for workers, the economic benefits might not be worth the complications.
It is time for Japan to unleash the third "arrow" of Abenomics: a long-term growth strategy underpinned by structural reforms.
Policies aimed at reaping the benefits of openness may not be politically expedient today, but would reap benefits tomorrow.