Re: Japan 's interest rate/excahnge rate dilemma

[User996472@xxxxxxx]

Henry:

Given Japan's problems and uncertainties, I think Japan is implicitly hoping
to use her financial mkt. (more explicitly, her stock market) in an attempt
to concoct a wealth effect scenario to spur aggregate demand. (Since past
efforts to jump start the economy is unavailing, isn't it time to move to the
path of unconventionality?  Well, maybe Krugman's inflation inducement
suggestion might be feasible.)  One caveat: The wealth effect scenario is
only theoretically possible if and only if all other macro variables are
instigated by this effect.  Sadly, Japan has profound structural problems to
begin with; therefore, unless Japan restructures its economy both on a micro
and macro level thoroughly, the stricken Japanese economic structure is
perpetual.

Regards,
Tom