Japan's macroeconomic problem has yet to be properly diagnosed. Throughout the 1990s, policy makers could not decide on the proper macro economic measures to combat the country's severe economic slump. We propose a unified explanation, with deep historical roots, of why aggregate private demand...

Japan's interest rates have been compressed toward zero because of pressure coming through the foreign exchanges. Twenty years of current-account surpluses have led to a huge buildup of claims - mainly dollars - on foreigners. Because of ongoing fluctuations in the yen/dollar exchange rate,...

<heading id="h1" level="1" implicit="yes" format="display">Abstract</heading> 'Capitalism without failure is like religion without sin'. Charles Kindleberger's book Manias, Panics and Crashes points out that speculation and crises have always been present: the world economic crisis of the 20th century, the South Sea bubble in the 18th century, and the tulip mania...