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Summary
Registered unemployment as a proportion of the civilian working population.
According to Milton Friedman and Anna J. Schwartz (1963), the Great Depression in the 1930s in the USA would have been substantially less serious if the central bank, with its rigid monetary policy, had not adhered to the common, but false view that ‘belt-tightening’ was necessary in order to overcome inefficiency in the economy.A Monetary History of the United States 1867–1960 New York, pp. 299–419, especially p. 409.
Currency in circulation plus reserves held by banks with the central bank, adjusted for changes in statutory reserve ratios.
Stock of outstanding loans by all ‘licensed’ banks.
Essentially, M1 (currency in circulation and sight deposits) plus liquid bank deposits.
Despite repeated reassurances by the government that bank deposit losses would not be tolerated, in the course of the 1990s savings were transferred from deposits held with the ‘licensed’ banks to accounts with the post office bank, which was considered relatively safe, and also to increased hoarding of cash.
These figures refer to the central government budget. No reliable data are available on the state of the public-sector budget as a whole. It is a matter of dispute, for example, to what extent the post office bank, the deposits in which finance an important part of government spending, should be classified as part of the public or private sector. According to inofficial estimates, the real figures are consistently higher than the official data; the debt ratio is estimated at 130% and the deficit ratio in fiscal year 1999 (beginning on I April) at 10%.
Paul Krugman (1988) writes, with reference to Corsettiet al. that banks threatened with insolvency had an incentive to react to official announcements of debt-management programmes by expanding their lending, if they expect a government bail-out. It's baack! Japan's Slump and the return of the Liquidity Trap, (mimeo), Cambridge/Mass., p. 40 ff.; see also Corsetti, G. et al. (1998), Paper Tigers? A Preliminary Assessment of the Asian Crisis (mimeo).
There is considerable evidence to support the view that negative rates of interest on central bank lending are ineffective: if central bank lending, and thus also bank deposits, bear negative rates of interest, central bank loans would be used to increase cash holdings, as holding cash offers a positive real rate of interest equal to the expected fall in prices. This argument is only partially valid, however, as there are limits to cash withdrawals. Keeping large amounts of cash at home is so risky that it would have to be deposited, at a charge, in bank safes. Moreover, payment by cash over longer distances is more expensive than cashless forms of payment. Even so, there are currently a number of foreign-owned banks in Japan that can afford to charge a negative rate of interest on deposits; cf (Daniel L. Thornton ‘Nominal Interest Rates: Less than Zero?∝,Federal Reserve Bank of St. Louis: Monetary Trends, January 1999, p. 1)
Kiyohiko Nishimura at a conference on ‘Restoring Japan's Economic Growth’, published in the Institute for International Studies,IIES Seminar Series 9809 Tokyo 1999, p. 36.
This line of argument in a deflationary situation with ‘troubled banks’ was put forward in the summer of 1998 by the research director of the Federal Reserve Bank of St. Louis, whose approach is much closer to monetarism than Keynesian demand-oriented theories. Cf. William G. Dewald, ‘Money and deflation in Japan’,International Economic Trends, August 1998, p. 1. Incidentally, there are indeed economists who, in spite of the debt trap, argue in favour of a rigorous policy of fiscal expansion, although not without prior restructuring of the banking system. Cf. Hirohiko Okumara, loc. cit., p. 20.
Krugman, loc. cit. (1998) writes, with reference to Corsettiet al. that banks threatened with insolvency had an incentive to react to official announcements of debt-management programmes by expanding their lending, if they expect a government bail-out. It's baack! Japan's Slump and the return of the Liquidity Trap, (mimeo), Cambridge/Mass., p. 40 ff.
This is true both for an estimation period between 1970 and 1998 and shorter periods, up to 1990.
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Pohl, R. Japan: Can the threat of Delfation be averted?. Economic Bulletin 36, 13–20 (1999). https://doi.org/10.1007/BF02672688
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DOI: https://doi.org/10.1007/BF02672688