--%>
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 : Zero primary deficits What points out

    What points out zero primary deficits? Answer: Zero primary deficits signify that the government has to resort to borrowings simply to make interest payments.

    		•
  • Q : Why value of multiplier is low In poor

    In poor countries people spend a big percentage of their income so that APC and MPC are high. Yet, the value of multiplier is low. Explain why?

    		•
  • Q : The Fed can control the Fed funds rate

    Question: Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have o

    		•
  • Q : Inflation movements and factors Use

    Use economic theory to explain the inflation movements and factors influencing it. Use relevant models to explain the impact of changes in fiscal and monetary policies in curtailing inflation.

    		•
  • 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

    		•
  • Q : Define law of supply Law of supply : It

    Law of supply: It is the claim which, other things equivalent, the quantity supplied of a good increases whenever the price of the good increases.

    		•
  • Q : Evaluation of net present value Explain

    Explain evaluation of net present value (NPV) and internal rate of return (IRR) in brief?

    		•
  • Q : Moentary policy a restrictive monetary

    a restrictive monetary policy is designed to shift the

    		•
  • Q : Equilibrium The equilibrium interest

    The equilibrium interest rate is determined

    		•
  • 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

    		•