Kimitoshi Hasegawa – view of very reasonable Mr. Summers

June 13, Lawrence Summers, Mr. contributed to Reuters, I made a proposal of economic measures and views of the U.S. economy.The Summers said, is an excellent economist extremely admission to Massachusetts Institute of Technology at the age of 16, a genius such as become a professor at Harvard University 28 years old, and served as U.S. Treasury Secretary then.

Mr. Summers severe recognition

The contents of the contribution of Mr. Summers,

And the U.S. economy out of the crisis of 2009 – 2008 with the mobilization policy, but it is in the midst of the lost decade still
• The economy of the lack of demand that the United States has been placed, it is a movement that totally different from the normal economy, (the evidence) Japan is not economic growth almost 20 years
• Even if increased supply potential (growth potential), lack of demand economy, can not be expected effect
• The lack of demand economy, there is no effect on the number of jobs increase overall, even after vocational training
· There may last more than 10 years economic downturn after the collapse of the bubble, it is not possible to break away if there is no factor of (demand increase) and military buildup
Roosevelt, the United States, former President, would have stepped down as misgovernment person in 1941 if there is no military expansion associated with war
– To postpone the development and updating of the infrastructure is in error, interest rates are low, the unemployment rate in the construction industry is high (20%) should be expanded infrastructure investment Now
· You should not convert the easy monetary policy (low interest rates exceptionally)
And low growth in the U.S. economy, because it is the greatest threat the United States financial, and should continue to stimulate demand for financial, to be income tax cuts, corporate tax cuts

So that we.In other words, “lack of demand economy is quite different to a normal economy, there is no sense to increase the supply capacity.It is in the spirit of ultra-loose monetary, to perform infrastructure development to expand government spending, it should be carried out tax cuts, it would “lead to fiscal consolidation.

Enviable U.S. economy

Within the last year, is on a quarterly basis, nominal GDP, real GDP also has to update the peak of the Lehman shock before, the U.S. economy GDP growth, 4-5% nominal annualized even from earlier this year, It has remained at 2-3% real.It is economic growth of enviable from the perspective of Japan, the unemployment rate has remained high at around 9%, and FRB Chairman Ben Bernanke and Summers said, looking economy will not normalize if you do not expand the demand.

Opinion in Japan and the U.S. central bank does not match

On the other hand, Japan has been hit by the collapse of the bubble twice in the last 20 years, nominal GDP is in the same level as nearly 20 years ago.Only Japan, he must take the ultra-loose monetary measures such as FRB policies and Summers Mr. recommend, but not in that way necessarily.

For contributions of Mr Summers, to a reporter’s question, Shirakawa Bank of Japan Governor has said, “even if aggressive fiscal policy and monetary policy in the post-bubble economy does not return to promptly” in a press conference on June 14, It does not seem to agree necessarily the opinion of Mr. Summers.

However, at a press conference on June 22, Touch the deflation in Japan in 1990 or later, “decision of the central bank is key to avoid deflation,” and, even while sympathy to the Bank of Japan, Mr Bernanke effect of QE2 (Note) In comparison with, I have criticized the first of the correspondence of the Bank of Japan implicitly.It’s regrettable, but also look at the track record to be considered in theory, more of the United States seems to be correct.

(: The second round of quantitative easing of monetary Mark2 Quantitative Easing) (Note) QE2
 Be to dispel the deflationary concerns, it is possible to rise in stock prices, in order to reduce the unemployment rate to recover the economy, by June this year from November last year, FRB (Federal Reserve Board) is $ 600 billion from the market monetary easing policy of buying U.S. Treasuries.I do purchase U.S. government bonds but (about $ 250 billion over the same period) redemption MBS that maturity comes to another (such as mortgage-backed securities).

 The QE2, the unemployment rate decreased, deflationary concerns are dispelled, U.S. stock prices rose.Inflation concerns are on the reverse, but I have seen FRB as something temporary.