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Abstract

Vol. 50, No. 3, pp. 238-248 (1999)

“Fiscal Structural Reform and Japanese Economy”
Kazumi Asako (The Institute of Economic Research, Hitotsubashi University)

This paper discusses the desired direction of the fiscal structural reform in Japan in face of the desired features of the 21st century Japanese economy. For this purpose we first emphasize that the current Japanese "fiscal crisis" is not so critical, as is in fact reflected in the record low interest rate in the government bond market, partly because there are reasonable government assets and partly because Japan has accumulated huge foreign assets. Then we discuss the desired tax reform and dual roles of public investment as a way to accumulate infrastructure from the long-run perspective and a policy instrument to stabilize short-run business cycles.