--%>
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 : Surplus of the good Describe when there

    Describe when there will be a surplus of the good?

    		•
  • Q : Taxing imports-whats the problem ‘Must

    ‘Must a country which is less proficient at generating all goods use import controls to decrease imports from additional countries?’

    		•
  • Q : Explain growth accounting. Economic

    Economic growth is measured by the rate of increase in national output, GDP. The output depends on inputs -labour, capital technology etc. the theories of economic growth bring out how and to what extent each input or factor contributes to the g

    		•
  • Q : McConnell Brue Flynn 19e What

    What relationship does the MPC bear to the size of the multiplier

    		•
  • Q : Economic growth model Explain the main

    Explain the main features of Harrod - Domar Growth model. How does the Harrod Domar model explain the occurrence of trade cycles?

    		•
  • Q : Consumer Surplus and Producer Surplus

    In a graph of competitive market in equilibrium, the net surpluses producers and consumers enjoy generally equivalents the area among the: (i) Demand and supply curve however to the left of point of the market equilibrium. (ii) Horizontal axis and a 45°line origin

    		•
  • Q : What are the strength and weakness What

    What are the strength and weakness of using per capital national income? give explained answer for query

    		•
  • Q : Shifting of demand curve due to new

    Assume that the launch of Microsoft Xbox 360 moved the demand curve for Sony PlayStation 2 games from D0 to D1 throughout similar period if new game designers enter into this market and hence supplies of PlayStation 2 games shifted S0 to S1. The market equilibrium: (1

    		•
  • Q : Problem related to rising GDP Between

    Between 1961 and 2007, the rising share of the Canadian population in paid employment contributed to rising GDP per person. But suppose that the share of the Canadian population in paid employment had remained constant between 1961 and 2007. What would Canadian GDP pe

    		•
  • Q : Normative goals of macroeconomic

    Commonly agreed-upon normative goals of macroeconomic policy do not include: (w) high employment. (x) price-level stability. (y) redistributing wealth through the rich to the poor. (z) economic growth. Can someone

    		•