Japan's fiscal policy and the East Asian financial crisis

Japanese economic policy has been identified as one possible cause of the East Asian financial crisis that began in July 1997. In this article, Yoichi Okita, Professor of Economics at the National Graduate Institute for Policy Studies, Tokyo, discusses Japan's role in the recovery of East Asian economies. Can and should Japan contribute to that recovery? To what extent is the recession in Japan an important cause of slow recovery in the region? Okita explores and develops the concept of economic policy coordination. Although changes in the Japanese economy were not the origin of the East Asian crisis, he says, prolonged stagnation in Japan is, nevertheless, a drag on the economies that are in trouble. However, one country's fiscal actions alone cannot solve the crisis; rather, all countries in the region should work together to redress the problem.