Japanese fiscal reform: fiscal reconstruction and fiscal policy

This paper evaluates the recent movement of Japanese fiscal reform. We firs t summarize fiscal policy in 1990s. Then, we investigate several relevant t opics of fiscal policy such as the macroeconomic impact of government debt and the sustainability problem. We then consider dynamic properties of fisc al reconstruction process by analyzing the dynamic game among various inter est groups. This paper points out that the long-run structural reform is mo re important than the short-run Keynesian policy in Japan. (C) 2001 Elsevie r Science B.V. All rights reserved.