Japan: Deficits, Deflation and Debt

Richard H.K. Vietor; Haviland  Sheldahl-Thomason

Case | HBS Case Collection | June 2018

Japan: Deficits, Deflation and Debt

by Richard H.K. Vietor and Haviland Sheldahl-Thomason

Abstract

In April 2018, Prime Minister Shinzo Abe was again in Washington to petition Donald Trump. After years of rapid, export-led growth, Japan had slumped into recession in 1991 and never really recovered. For the past 27 years, its economy has grown at 1.1% annually, plagued by deflation. After several attempts at quantitative easing, Abe had commenced a radical program in 2012 called Quantitative and Qualitative Easing – the first of “three arrows” to repair the Japanese economy. But in early 2018, inflation was still far below the 2% goal, growth had turned negative, and Abe faced the highest debt among the OECD. Together with demographic, energy and security problems, Abe had his hands full, while President Trump roiled the waters in China and North Korea.

Keywords: deflation; debt; country analysis; monetary expansion; population growth; national security; Inflation and Deflation; Borrowing and Debt; Economy; Energy; National Security; Japan;

Language: English

Format: Print

33 pages

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Citation:

Vietor, Richard H.K., and Haviland Sheldahl-Thomason. "Japan: Deficits, Deflation and Debt." Harvard Business School Case 718-063, June 2018.

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Japan: Deficits, Deflation and Debt

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