the FT wrote:
>The Bank for International Settlements recently published a sobering
>report noting that falls in private-sector net saving on the scale that
>the US has experienced - minus 6.5 per cent of gross domestic product in
>2000 - have almost always been followed by sharp falls in economic growth
>two years later.
>
>... Junichiro Koizumi, Japan's prime minister, has announced ambitious
>plans for economic reform and restructuring. But Japan's partners in the
>Group of Seven industrialised countries fear that while these reforms may
>be good for the country's long-term health, they reduce the chance of a
>short-term recovery.
>
>"The weakest global link is likely to be Japan. Their intentions are good
>but their timing is bad," says Edward Yardeni, chief investment strategist
>at Deutsche Banc Alex Brown in New York. Heizo Takenaka, the economy
>minister, in effect warned this week that Japan could not be expected to
>be part of the solution to the world's economic woes for two years.
I read a lot of the Bank for International Settlements report on the world
economy. It was contradictory. On the one hand, there was a lot of very
sober Keynesian talk like that in the first paragraph above. On the other
hand, they clearly recommended neoliberal reforms (e.g., those that Koizumi
seems to be proposing) that typically make that aggregate demand situation
worse, while making the income distribution more unequal. They even
mentioned the likelihood that Japanes unemployment would rise during the
next few years as the result of the reforms.
Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
