Kikkawa Takeo, Vice President, International University of Japan   Key points Electricity providers show no signs of working with next-generation advanced reactors Old nuclear reactors to be dismantled when building next-generation advanced reactors Extension of operating period for existing nuclear power plants is unsuitable   Prime Minister Kishida Fumio and the Minister of Economy, Trade and Industry Nishimura Yasutoshi spoke about nuclear energy at the GX (Green Transformation) Implementation Council in August 2022, and some media outlets made a big deal of it and called it a “changed nuclear energy policy.” The Kishida administration listed the following two items for which political decisions are needed before the end of 2022 in order to resolve the delays in nuclear energy policy: (1) development and construction of next-generation advanced reactors and (2) maximizing the use of existing nuclear power plants, including an extension of ... ... [Read more]

  How do differences in political regime, such as between authoritarianism and democracy, affect a country’s economic prosperity and people’s health? I will use an econometric approach to political phenomena to address this question as I consider the reason why democracy should be defended.   Annaka Susumu, Assistant Professor, Hirosaki University 1. Political regime and economic affluence A political regime is defined as “the set of basic formal and informal rules that determine who influences the choice of leaders—including rules that identify the group from which leaders can be selected—and policies” (Geddes, Wright and Frantz 2014, p. 327).[1] It is a concept used to classify different political characteristics from country to country, such as democracy, authoritarianism, and autocratic regime.[2] How do differences in political regime affect economic affluence and people’s health? That is the question that this paper seeks to address. Looking at North ... ... [Read more]

    Yamanouchi Kenta, Associate Professor, Kagawa University   Key points Japan’s FTA networks are nearing completion The weaker the relationship with the partner country, the greater the effectiveness of the FTA Diversification of supply chains through active internationalization   Some believe that trade policy is at a turning point. The government is working on toughening supply chains for semiconductors and other products and has been implementing a project to encourage their return to Japan since 2020. Furthermore, the launch of the “Indo-Pacific Economic Framework” (IPEF), a new economic zone initiative centered on the United States, was announced in May 2022. Recently, some policies that are seemingly protectionist have appeared in Japan as well. On the other hand, Japan has concluded a series of region-wide FTAs and other agreements in recent years, and the FTA networks covering supply chains are generally nearing completion. In ... ... [Read more]

    Matsushima Hitoshi, Professor, University of Tokyo   Key points Utilizing Uzawa Hirofumi’s “social common capital” concept Redesigning negotiation rules to guide active cooperation among countries Changing citizens’ attitude of wanting to avoid carbon taxes also necessary   The world has become interested in thinking about economic development in relation to the global environment and social issues. How can we lead affluent lives, develop excellent culture, and make a humanly attractive society sustainable? Humanity has begun to explore a shift change from capitalism to address this important issue. As social responsibilities, commercial enterprises need to reduce the social costs of their own economic activities. Adding hazardous substances to food or discarding plastics causes negative externalities. This cannot be resolved unless the parties concerned eliminate the causes by themselves. The role of government capable of enforcement is important in resolving externalities, with environmental tax ... ... [Read more]

  Nakazato Toru, Associate Professor, Sophia University   Abenomics came to an abrupt end without sufficient evaluation or summation. Its general form has continued in the economic policy of the Kishida Fumio administration, and it can be said that Abenomics is still ongoing, but there is no guarantee that this drama will continue as it has in the past without its leading actor. Concerns about a weak yen and high prices have also raised calls for a review of monetary easing. It will take considerable time to take a step back and position Abenomics in history from an objective standpoint, but it would still be meaningful to record its trajectory so far together with the contemporary mood before memory fades. In this paper, as a small attempt toward this work, I look back on its development over the past 10 years or so. 1. ... ... [Read more]

    Honda Yuzo, Professor, Osaka Gakuin University   Key points Japanese products easy to sell despite deteriorating terms of trade Positive impact of weak yen on GDP and income balance Capitalize on the opportunity to put the Japanese economy on a growth trajectory   When examining the merits and demerits of the rapidly depreciating yen, we should note that other factors than the exchange rate are sneaking into the discussion. It is wrong to blame the current Japanese inflation solely for the weaker yen. Prices in Japan are rising as a result of the soaring prices of global resources and foods at the same time as the yen is depreciating. According to some commentators, the weak yen causes only losses due to the deteriorating terms of trade (the prices of exports divided by the prices of imports) and that no tangible benefits are ... ... [Read more]

    Watanabe Mariko, Professor, Gakushuin University   Key points Deng Xiaoping achieved rapid growth by destroying vested interests The current administration prioritizes national security at the expense of openness to the outside The strategy increases burden against their own costs   The National Congress of the Chinese Communist Party is held in China this autumn. The future course of the Chinese economy will depend on the choices made by China’s political and economic systems. This article provides a bird’s-eye view while referencing the discussion about the relationships between economic growth, institutions, and technology choices in a political economy. ◇　　　◇ China is the world’s second largest economic power, but GDP per capita has still not reached the levels of developed countries. According to economic growth theory, if a country has the same institutional environment [as developed countries], the lower the income level of the ... ... [Read more]

    Makino Kuniaki, Professor, Keio University   Key points Emphasis on international division of labor rather than securing colonies Lofty Anglo-American ideals severely criticized as deception in Japan Demonstrate benefits of liberalization to avoid a crisis in the international order   Ishibashi Tanzan (1884–1973), the economist who played a role in the gold embargo controversy in the early Showa period, turned to politics after the war and became prime minister. He is known for his criticism of the “great Japanism” that aimed to acquire colonies in the Taisho period (1912–1926) and for championing the so-called “little Japanism.” The ideas that Ishibashi developed based on his research of classical economics in Britain, including Adam Smith and David Ricardo, provided the context for his arguments. According to Ishibashi, the source of wealth is found in labor and the economy is based on the division of ... ... [Read more]

  KOBAYASHI Keiichiro, Program Director and Faculty Fellow, Research Institute of Economy, Trade and Industry (RIETI) Global Inflation and Inflation in Japan The current global inflation apparently has aspects of both “cost-push inflation,” which is attributable to supply-side factors such as the worldwide supply chain disruptions due to the COVID-19 crisis and constraints on resources and energy due to the Ukraine situation, and an “inflation spiral,” in which a wage upsurge caused by a labor shortage and general price increases mutually amplify each other. If such a self-perpetuating inflation spiral accelerates, eventually, the kind of hyperinflation that frequently strikes developing countries could be triggered due to the loss of public confidence in currencies. Therefore, governments around the world are trying to hold down the ongoing inflation by slowing down economic activity through rapid monetary tightening. The situation in Japan is not an inflation spiral ... ... [Read more]

  Mukunoki Hiroshi, Professor, Gakushuin University   Key points Doubts over the effectiveness of any rules or agreement reached under the IPEF Expectations for the IPEF as a bridge connecting different cooperation frameworks Opportunity for discussion of export restrictions, which existing trade agreements leave untouched   With the global economy facing a myriad of risks and with the emphasis being put on economic security, the Indo-Pacific Economic Framework (IPEF) is attracting attention as a new opportunity for international economic cooperation among nations. The IPEF was proposed by President Biden in May. It is a mechanism to build international cooperation, focusing on four pillars: trade; supply chains; clean energy, decarbonization and infrastructure; tax and anti-corruption. Fourteen countries, including Japan, South Korea, India, as well as countries from Southeast Asia and Oceania, have agreed to join (see Table). Whilst the United States has seen its presence in the international ... ... [Read more]