--%>
Assignment Help - homework help

Crisis in Japan & US

Question:

What can we learn from the Japanese experience? Is the US headed for a 'lost decade?

Answer:

There was a similarity in the way the economies of Japan and US went into the crisis: it started from the real estate bubble burst which was caused by sub-prime lending. It was the lack of aggregate demand which caused the major trouble, along with contractionary conditions. The investment rate was low and liquidity trap existed. However, the case of US is not the same. US responded to the downturn almost immediately and the recover, though slow is already on way. The most important aspect is that unlike Japan, the US financial and banking structure is more transparent and regulated, at least now, than the erstwhile Japanese counterpart. The US has also made many efforts to help the panicked credit markets than Japan. So, it does not seem that US will experience a "lost decade".

 

   Related Questions in Macroeconomics

  • Q : Type of market when people cannot buy

    Whenever people can’t purchase all of a good they are willing and capable to pay for at present market price, there is surely a market: (1) Price ceiling. (2) Price floor. (3) Shortage. (4) Anomaly.  (5) Surplus. Please

    		•
  • Q : Difference between APC and MPC

    Differentiate between APC and MPC. The value of which of them can be greater than another and when? Answer: APC is the average

    		•
  • Q : Macroeconomics-fiscal and monetary

    1) How can governments seek to control their national economies through fiscal and monetary policies?2) What are the causes of the fiscal deficits experienced by many developed nations in the past three years and what are the main effects

    		•
  • Q : FX rates In June 2005, a Big Mac sold

    In June 2005, a Big Mac sold for 6,000 pesos in Colombia and $3.00 in the United States. The exchange rate in June 2005 was 2,300 pesos per dollar. So, on Big Mac purchasing power parity grounds the Colombian peso was

    		•
  • Q : Supply of foreign currencies into

    What are the main sources of supply of foreign currencies into domestic economy? Answer: A) Foreigners purchasing home country’s goods and services via exports. B) Foreign investment in home country via

    		•
  • Q : Development economics Government tax

    Government tax and transfer payments generally

    		•
  • Q : Profit sharing plan For the firm, the

    For the firm, the major goal of profit sharing plans is to:

    		•
  • Q : Problem on promotion When Sam Sleaze

    When Sam Sleaze sells Terry Tone-deaf a low-quality stereo by promotion as the "top of the line", there is a trouble of: (1) Moral hazard. (2) Irrational ignorance. (3) Adverse choice. (4) Paradox of value. Can someone help me in g

    		•
  • Q : State the Income Effect Can someone

    Can someone please help me in finding out the accurate answer from the following question. The Income effects are: (i) Adjustments people make since the purchasing power of the given income is modified whenever prices change. (ii) Adjustments people make since the pur

    		•
  • Q : Balance of trade IN which situation,

    IN which situation, there is a deficit in the balance of trade.

    		•