Economic Analysis Of The Post-war Japanese Government Bonds

Japan's economy, due to its important position in the world economy, has been highly focused by scholars both at home and abroad for a long time. And its national bond policy has also interested people. According to its successful practice, either in the capitalism being formed, developed and established before World War II, or during the development, and prosperous course of Japan's economy after World War II, the policy of the government bonds has become the indispensable macro economic policy tool of Japanese government. And after the bubble economy collapsed at the beginning of 1990s, Japan's economy fell into a long-term depression, while dealing with economic depression, Japanese government still has to face another difficult problem--serious government bonds risk and difficult fiscal predicament that break away from day by day, and these same to there are close connections with the government bonds application of policy all. The government bonds is generally regarded as the debtor by the central government of one country; undertake the debtor-creditor relationship formed of obligation of certain behavior to the domestic and international economic subject according to the regulation of the law. The government bonds, as government's credit, as the debt of the central government, is a fiscal category firstly. It is longer in western history. But the government bonds in the modern meaning is produced and developed with formulation and development of the relations of production of the capitalism, it is a kind of public credit developed on the basis of modern credit system. However, before the 1930s, the capitalist classes objected to state intervention, the government's function was only limited to guaranteeing that production order and civil order of the capitalism ran well at that time. The capitalist country in this period advocates the budget balance in finance. And the issue of the government bonds is only a special phenomenon, while happening in special accidental event mainly (such as the war). However, after the great crisis at the beginning of the 1930s and World War II, especially with the rise of Keynesian Economics, people have already realized that the capitalism can't be totally autonomous readjustment through free competition. The government must shoulder the important task. That is to say, the government should expand the function; it should strengthen economic intervention and regulation to deal with the harassment of the economic crisis. The government should maintain normal speed of the economic growth. This intervention and regulation are mainly achieved through revenue reduction and the expenditure incretion of the finance, which resulted in deficit of fiscal budget. It will definitely issue a large amount of government bonds to cover deficit. Certainly, besides remedying the fiscal deficit, the government bonds can also adjust and control economic operation, and play an important role for investment government utility. Besides fiscal category, the government bonds are also playing a special role in the financial field. With the increasing importance of the government bonds in economy; the focus is also concentrated to the government bonds. The economists of various schools, on the basis of different positions, have launched more and more profound researches on a series of relevant problems of the government bonds theoretically, and have put forward one's own views and opinions one after another, even has launched fierce dispute, thus form the different theories of the government bonds. Similar to other countries, in the course of economy and social development, the Japanese government bonds policy is brilliantly noticeable. Before World War II, Japanese government issued the government bonds oftenin order to meet the funds of the following respect's demands: the system reform, military expenses, and so on. Especially on the expansionism in Japan, the role of the government bonds in economic life seems increasingly outstanding, and its negative effect increasingly appears. After World War II, while making the new constitution and carrying on democratic reform, Japan issued the legal provisions in a series of fiscal respects, demilitarize to the war fiscal system and democratization reform. And it has formed the distinctive fiscal system on this basis. In the new fiscal system, Japanese government inherits the principle of the fiscal balance doctrine within some time after World War II, abandoned the government bonds. But with the fluctuation in economic cycle, a better and flexible fiscal policy became more and more demanded. By Japanese government resumed bond financing in order to strengthen macro adjustments and controls dynamics in FY1965 finally, it has entered and issued for the positive fiscal period of the characteristic with the finance of the deficit and the government bonds since this has been broken after World War II too. With the need of the economic changing situation, the Japanese government bonds issuing scale demonstrated the overall situation that rose, especially after the bubble economy collapsed at the beginning of the 1990s. Because the dependence on fiscal policy of expanding was stronger and stronger, it causes a surprising scale of the government bonds. Generally speaking, it is mainly for strengthening the macro adjustments and controls of economic operation that the government issues bonds, and making every effort to realize the set economic goal. But the government bonds can achieve this function? Theoretically, this is basic points for the economic effect of the government bonds analyses. Since classical economics, it has already become a question that the scholars of west economics have focused upon. The economists of different schools have launched the deep researches for a long time to this question through different positions. As results regarded, there are very great theory disputes, the view that even hascompletely contradicts each other. In the theory dispute about the economic effect of the government bonds of educational circles of west economics, it seems that no proposition can exert more and farther influence than the proposition of "Ricardian Equivalence Theorem". It includes a very deep policy meaning: Government bonds could not cause total social demand competence any change, and then national income level could not change either. Further, if Ricardian Equivalence Theorem is establishing, then through issue positive fiscal policy government bonds implement invalid; on the contrary, it will be effective. Therefore the analyses of Ricardian Equivalence Theorem and examples are of great significance. The example in this dissertation through issuing to the Japan government bonds since FY1965, saving, consuming and investment change is analyzed, the conclusion must happen finally: Ricardian Equivalence Theorem is not suitable in Japan after World War II. As noted above, the government bonds have fiscal function not merely in financial market but also functions in the national economic development through theory analyses we can know the government bonds can produce expansive or neutral influence to currency supply. And through supplying the Japanese government bonds and currency since FY1965 with the analysis of the change trend and calculating, we find the remaining sum of the government bonds and M2 +CD long-term relation with instability between the two, then conclude that effect of the government bonds operation in currency supply is less distinctive after World War II too. In addition, in the course of economic development after World War II, Japan has formed the unique banking system. We should admit that this impact on Japanese economic development after World War II of banking system is deep and complicated. But with the change of the economic environment inside and outside, it has received greater and greater impact, produced the necessity and urgency improved too naturally. In this course, the government bonds can not be...