Japanese Financial Policy & Economy

Priority Reg: IFEP Concentration. Pre-req: SIPA U6401. The objective of this course provides students with deep knowledge on developments of financial policy in Japan and interactions between financial markets and economic development. Financial policy extends from regulation and supervision of the banking sector, to capital markets and international capital flows as well as monetary policy and exchange rate policy. Policy lessons are derived from analyses of the past banking problems and crises. An impact of switching from the fixed exchange rate regime to floating exchange rate regime and subsequent attempts to manage the exchange rate movements will be reviewed with event analyses and case studies. Economic growth rate of Japan was high in the 1950s and 1960s and later declined; how financial market developments contributed to economic growth; how quickly its markets were opened to international trade and finance; why the Japanese economy has suffered stagnation and deflation due to a burst of a financial bubble in the 1990s and 2000s; and what kinds of policy reforms, known as Abenomics, have been implemented since 2013. The description and explanation are based on intermediate microeconomic and macroeconomic analyses and empirical evidences. The role of economic policies—monetary policy, fiscal policy, financial supervision and regulation, industrial policy—will be carefully examined.