Product Description

In this groundbreaking book, leading international economist, Richard Koo argues that far from being the sick man of Asia, Japan is suffering from a temporary but highly unusual economic aberration.

Economists and business commentators have always assumed that the majority of companies in any economy are forward looking and are trying to maximize profits. They never considered the possibility that a vast majority of companies may be placing their highest priorities on minimizing debt in order to repair their balance sheets. But that remote possibility has been the reality in Japan for the past decade, and more recently in many other countries including at least a part of the US.

Balance Sheet Recession argues that contrary to popular belief, it is this massive shift in corporate behavior, instead of structural problems, that is the root cause of both the deflation and the non-performing loan problems that have troubled Japan for so long. It argues that when the causality runs from the corporate balance sheet problems to deflation and banking problems, a highly unconventional policy response is needed to stabilize the economy. After all, the last time anything similar has happened was the 1930s in the US.

Richard Koo's experience in dealing with both the US banking crisis of the early 1980s and the Japanese balance sheet and banking problems of the last ten years makes him unique qualified to comment on this situation. He clearly explains how such a recession can happen in any economy following an asset price bubble, and how best to deal with it.

Product Details

• Amazon Sales Rank: #695235 in Books
• Published on: 2003-10-24
• Format: Illustrated
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 280 pages

About the Author
Richard C. Koo is the Chief Economist of Nomura Research Institute, the research arm of Nomura Securities, the leading securities house in Japan. Consistently voted as one of the most reliable economists by Japanese capital and financial market participants for nearly a decade, he has also advised successive prime ministers on how best to deal with Japan?s economic and banking problems. He served as an economist with the Federal Reserve Bank of New York, and was a Doctoral Fellow of the Board of Governors of the Federal Reserve System. Author of many books and a visiting professor of Waseda University, he was awarded the Abramson Award by the National Association of Business Economics, Washington, D. C. for 2001.

Customer Reviews

The Book that will Help you Understand what is Going on in the Economy
I can't say enough good things about this book. He gets to the root causes and potential solutions of our current economic conditions in a clear and concise way. He should get a Noble Prize for his work (whatever that's worth considering recent recipients).

If you're an investor you'll make your money back many times over from his insight.

Brilliant, simply brilliant.

Asset Bubbles & Their Potential Implications
A recount of the reasons and the monetary policy implications of the Japan experience after the 1990 asset bubble collapse. The interesting points are that many of the macro items discussed are eerily similar to what is happening in the US today. The bigger point of interest is where the Japanese system had a leveraged corporate debt issue, the US has both a corporate and a personal debt issue. Therefore, what are the implications when we as a society start to pay off on this debt? and when/if the Government changes their fiscal policy and starts to balance the budget? No matter, the markets will figure this out before most Americans realize what has hit them. All in, it was an interesting economic read both from a economic geek perspective and as many past government trade polices were detailed with colorful insights.