The Japanese government is preparing additional stimulus measures to the amount of up to 30 trillion yen to boost their ailing economy.
A combination of factors have made this necessary, an ever rising yen has dampened export growth, the credit crunch has made operations difficult for corporations and the global recession shrank the Japanese economy by 12.7% in 2008.
This is the fourth stimulus package announced by Tokyo since last August, the total of which is now over 75 trillion yen.
My Opinion: It remains to be seen how much success the Japanese will have with their latest round of fiscal stimulus. Japan already has a public debt of over 150% of GDP thanks to relentless public spending projects in the 1990s and early 2000s, which didn’t provide the economic boost it needed.
Japanese fiscal stimulus measures are widely regarded as inefficient as non-essential infrastructure development is often selected, rather than socioeconomic development that could benefit society and the economy as a whole for a longer period.
It remains to be seen how this will play out, with a little luck, the Japanese have learned from their botched Keynesian experiments of years past.
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