The Bank of Japan announced its latest initiatives (“BOJ targets yields in new strategy” in the Sept. 22 edition) and the financial press was filled with the same old comments about “need for structural change,” “failure of Abe’s third arrow,” etc.
One of the things I struggle over with these analyses is the time impact of change. I have led large businesses that required major turnarounds and have some sense as to the time lag after structural changes are made.
Financial experts and economists talk about structural changes required in Japan but seem to either entirely discount all of the ones that have been implemented or do not appreciate how long it takes for a structural change to impact the economy.
We have seen liberalization of the electricity distribution market, privatization of postal and parcel deliveries, the elimination of the JA monopoly on the agricultural sector, which was critical to get the Trans-Pacific Partnership completed in Japan, a range of corporate governance initiatives and various support for women to enter the workforce and healthy senior citizens to stay in the workforce, and an easing of restrictions on working visas for foreign workers and permanent residency.
The list of changes in the past three years is actually incredible and there is even more going to be passed in the next Diet session regarding increased labor mobility, more corporate governance and equal pay for equal work, but these things all take time to manifest themselves in measurable impacts on the real economy.
Economists seem to be more patient about monetary and fiscal changes than they are about structural ones.
The opinions expressed in this letter to the editor are the writer’s own and do not necessarily reflect the policies of The Japan Times.
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