Overview
- Presents a macroeconomic framework in which fiscal policy is the determinant of prices level
- MMT's assertion "fiscal deficits increase our wealth " is derived from the standard macro-model
- The model explains how public debt contributes to economic welfare despite leading to financial collapse
Part of the book series: SpringerBriefs in Economics (BRIEFSECONOMICS)
Access this book
Tax calculation will be finalised at checkout
Other ways to access
Table of contents (7 chapters)
-
Front Matter
Keywords
About this book
In this study on the Japanese economy, the author focuses on three problems related to economic policy and presents their answers. The author analyzes (i) what mechanisms exist for fiscal policy and the price level, (ii) whether the MMT proposition that public deficits increase people’s wealth and savings fits into the standard macro model, and (iii) whether Blanchard's assertion that fiscal deficits are net wealth in the US economy can be applied to Japanese economy as well. The propositions of Sims’ FTPL, Kelton's MMT, Japan's Ricardian type argument, and the non-Ricardian type of government by Blanchard have been understood as independent economic perceptions, but they will be theoretically shown as a coherent story. Namely, this study presents a macroeconomic framework that includes the financial sector and derives Sims’ proposition that “fiscal policy can be the sole determinant of the price level.” It also shows that MMT's claim that "budget deficits increase our wealth and collective savings" can inevitably hold within this framework. Furthermore, it presents a model that consistently explains that public debt leads to financial collapse but contributes to economic welfare.
Authors and Affiliations
About the author
Yoshikiyo Sakai is Professor Emeritus, Yokohama City University and Kanagawa University, Japan.
Bibliographic Information
Book Title: Deflation and Fiscal Deficits
Book Subtitle: Three Questions About Japanese Economic Policy
Authors: Yoshikiyo Sakai
Series Title: SpringerBriefs in Economics
DOI: https://doi.org/10.1007/978-981-97-0415-6
Publisher: Springer Singapore
eBook Packages: Economics and Finance, Economics and Finance (R0)
Copyright Information: The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2024
Softcover ISBN: 978-981-97-0414-9Published: 10 April 2024
eBook ISBN: 978-981-97-0415-6Published: 09 April 2024
Series ISSN: 2191-5504
Series E-ISSN: 2191-5512
Edition Number: 1
Number of Pages: VIII, 73
Number of Illustrations: 5 b/w illustrations, 10 illustrations in colour
Topics: Macroeconomics/Monetary Economics//Financial Economics, Economic Growth, Economic Policy