The
top college in Greater Noida, Ishan has been at the forefront of incorporating contemporary issues of
business and economics into its curriculum. While the last few weeks have
focused on BREXIT, in today’s piece we turn towards Asia. Japan forms the
centre piece of our analysis. It makes enormous good sense to assert that the
Japanese economy is in the midst of string recessionary currents and there are
no signs of the Japanese PM Shinzo Abe being successful in navigating the ship
of the Japanese economy. The point that makes the entire episode so bizarre is
that Abenomics that is essentially an extension of the Keynesian policy of pump
priming has failed to produce the desired results in the case of the Japanese
economy. The stimulus packages offered by the Shinzo Abe led government in
Japan has incorporated pump priming but to no avail. At
the top college in Greater Noida, Ishan, we believe that the curious case of Mr. Shinzo Abe and consequently
the Japanese economy presents a case for rethinking on the viability of
Keynesian pump priming policies. The devil in the data shows that Japan is
slowly but unfortunately walking the path of fiscal profligacy that if not
addresses with concurrent measures like taxation to reinforce inter-temporal equilibrium
may lead to far worse consequences.
The Top College in Greater
Noida on Abenomics: Devil is in The Data
At
the top college in Greater Noida we believe that the failure of stimulus
packages to lift the drowning animal spirits of capitalism in Japan require an
analysis into the budgeting technique being used in Japan along with an inquiry
into possible leakages that may exist. To begin with here is some interesting
data on the Japanese economy:
·
Investment levels are still below
pre-crisis levels. Investment for Q1,
2016 stands at 72 trillion Yen vis-a-vis 77 trillion Yen for Q1, 2007.
·
Japan is yet to overcome deflation. The
inflation level for 2015 was at 0% against -0.2% in the year 1998.
·
Japan cannot leverage the demographic
dividend. It has 26.3% of its population above 65 years of age.
·
Japan has one of the lowest population
growth rates. It has a fertility rate of 1.4% against the global median of 4%
·
Japan is not receptive enough to
immigration. The immigration percentage stands at 1.6% against a global median
of 45%.
·
Japan has an incredibly high debt to GDP
ratio of 246.6% against the global median of 82.2%.
Probably
this set of data offers a possible explanation for the continued crisis in
Japan and the failure of the stimulus packages. For the Japanese economy to be
analysed in economic terms, the academicians of the top PGDM college in Greater
Noida, Ishan Institute of Management & Technology have translated these
statistical measures into cultural and administrative insights. Take a look.
Remedy
|
Obstacle
|
Expand the
workforce by including women and allowing old people to keep jobs longer
|
Cultural
workforce traditions and seniority systems in corporations
|
Counteract
negative demographics by allowing immigration
|
Deep aversion
to immigration from policy makers and the local population
|
Hike taxes to
lower government debt
|
Political
compulsions from people and corporations against tax hikes
|
Institute
industrial and labour market reforms
|
Resistance
from labour unions, industries and lack of political will
|
Japan
has done more than enough to foster economic ties with the world in the
aftermath of the Second World War. To this extent Japan has aggressively
promoted foreign direct investment by other companies in Japan and vice versa.
Japan has a very strong export sector that has proven competencies in the
verticals of automobile, software, heavy engineering, infrastructure and
logistics. Yet Japan somewhere represents the face of a society that is yet to
come to terms with the latest and the most advanced level of globalization i.e.
immigration and cultural exchanges. Hidden behind the sophisticated bullet
trains, total quality management revolutions and fast cars of Honda, Suzuki and
Nissan are the age old orthodoxies of a culture that is steeped in tradition,
seniority, rigid social strata that is by and large immobile and does not allow
too much scope for interaction of foreigners with Japanese. Under such
circumstances Japan is left to lick its wounds while leading a sequestered
lifestyle.
At
Ishan one of the top colleges in
Greater Noida we wish to engage in greater data collection on the economic
plight of Japan with a belief that the issue with Japan has larger
ramifications and roots that extend beyond the obvious mathematical economics
of pump priming and need to be seen in the broader context of the CAGE
framework of Dr.Pankaj Ghemawat, IESE School, Barcelona by incorporating
cultural and government factors to the stereotyped mathematical modelling
preferred by macroeconomics experts.
