1. The World Is Becoming Japanese
By Milena Radz, Michael Prizant, Joshua Ronai, and Kevin Ordonez
Section A
Group F

2. What Does This Mean?
Everyone is battling through the effects of a recession. No one knows what to do anymore, and is turning to alternative monetary policy in order to stay afloat. As a result, national economies have become more stagnant due to relatively near- sighted decisions. Japan started it, and the rest of the world is starting to follow.

3. Monetary Policy
Processes and plans that are drafted and implemented by some monetary authority of a country
Mandated to increase GDP, decrease unemployment, maintain foreign exchange, and maintain inflation
Generally 3 tools used
Open Market Operations: Buying/selling short term bonds to add money to the banking system
Interest Rates: Rates that act as collateral for a bond or loan a bank takes
Reserve Requirements: Funds banks must maintain to meet their liabilities
2 Types:
Expansionary: Aim of increasing economic growth and activity in a recessionary phase
Contractionary: Aim of decreasing economic growth and activity in a recessionary gap

4. Unconventional Monetary Policy
Generally used to aid in resolving financial crises
“Expansionary”
Zero Interest-Rate Policy
Interest Rates fall to around zero percent
Quantitative Easing
Purchasing large amounts of bonds in order to encourage lending and investment
Though these can help save an economy, there is also a lot of potential risk
Liquidity Traps
Stagflation

5. Why Does Anyone Care?
Japan, Europe, and the United States have all resorted to ZIRP
Japan: Set all interest rates to zero percent in 1990s amidst Housing Bubble
Europe: Severely lowered interest rates during Euro Crisis
United States: Used ZIRP as one of several tactics to combat the Great Recession
All of them are still doing it and have yet to pull out
Source:

6. Glimpse Into the Future
declining population & workforce
elderly on the rise
enormous government debt
Japan General Government Gross Debt to GDP is going to be about 249% which is about twice the amount of U.S.’s which is at 108%

7. Nation’s Aging & Labor Force
“half of Japanese children born in 2007 are expected live to 107”
birth rates have declined
total fertility rate 1.4 compared with an OECD average of 1.7
“labor force will drop 25% by 2050”
efforts to reduce the debt would cause more problems
limited immigration to preserve the country’s identity
1.9 percent of foreign residents

8. What does turning Japanese mean?
References how Japan’s growth has become stagnant
Lots of modern countries (Europeans, the US and China) are starting to experience a slower growth in their GDP’s
This leads to a fear that they will become a stagnant economy, something that is inherently bad
Bc Japan was the first large country to become stagnant (~20+ish years now) the phenomenon of countries economies slowing down is labelled after them
Bad because there should always be growth
Japan has lots of dept, but is kept afloat by the large amount of savings that its citizens have
EU and US citizens don’t have nearly that much

9. Japan vs Europe
Massive economic difference between Northern and Southern Europe
Southern countries have large amounts of unemployment + not much growth
Northern countries have experienced massive growth
BC of the eurozone, it makes it so that all countries are actually hurt not helped
Japan never hit by the massive unemployment
Have always had good employment, so never hurt by that
Japanese economy is starting to make a comeback
Europe had to deal with the refugee crisis, Japan didn’t
Lots of money invested into dealing with the refugee crisis
Hurt their economy
Not much to show for it
Japan didn’t have to deal with that bc of how highly nationalistic it is
Immigrants to japan are rare, and they don’t accept in refugees

10. Japan V.S Europe pt2
Japan has had very slow - and oftentimes negative - growth
Shows growth over the last 3ish years
EU has been growing at a larger rate over time
Is now starting to slow
2.9% -> 1.4%

11. Japan vs the United States
US economy is starting to slow down, but has the potential to grow more
Grew only 2.1% in the most recent quarter
Causing an interest rate cut
Japan’s economy has grown very little, and is expected to slow down
Only ~.5% growth over the past quarter
Our economy is still stronger overall, with more exports, higher GDP, and higher GDP per Capita

12. There is some change happening
Small signs that Japan is starting to come back
Major Saudi-Arabian oil company listed its stocks in Tokyo
Major boost - only 5 foreign companies listed there
Tokyo has been out of sight + mind for a bit
Difficult to say in the long term, though