Economic Analysis Of Japan's Fiscal Deficit

Fiscal imbalance problem is now prevalent in the developed countries.This thesis systematically does research in the fiscal deficits problem in Japan. This thesis describes the fiscal dificts problem and government fiscal policy in different periods, reveals the possible reasons for the high deficits and government debts and evaluates the fiscal reconstruction effectiveness on the basis of Japan’s history.Apart from that, this thesis does comparative study among the fiscal imbalance problem among Japan, EU area and the US in order to reveal some common and different factors behind these developed countries. Using empirical method, this thesis also tests the debt sustainability and the influence of government expenditure toward economic growth.On the basis of the research results, this thesis hopes to give some constructive recommendations on the prevention of overdue fiscal deficts for China.This thesis is divided into six chapers:one introductory chapter and five other chapters.The first chapter givesthe research background and the purposes.Also relevant literature from classic theory to the most updated papers are summarized. The framework and the structure,the research methods,the innovations and future research direction are also introduced in this chapter.The second chapter gives general analysis towards fiscal deficits.It explored the classification and their economic meanings, the fiscal risks caused by overdue high fiscal dificts and government debts and relevant monitoring economic indicators.The third chapter mainly introduced the developmental history and underlying reasons for the high deficits. This chapter is organized in chronological order and the relevant analysis is based both on the expenditure and revenue of the Japanese government. The fourth chapter did comparative research among Japan, EU area and the US.It gives detailed description of the fiscal imbalance problem of three countries, their fiscal policies and reasons behind this. On the basis of the research, this chapter hopes to find some common factors behind the prevalent fiscal problem in these developed economies and the unique causes for each country.The fifth chapter utilizes empirical research methods and trys to test the debt sustainability and the influences of government expenditure towards economic growth of Japan.The last chapter studies the policy implications for china from other countries and gives some constructive recommendations. It introduced the fiscal situation in China, some problems may negatively influence Chinese fiscal situation in the near futureand policy recommendations for China.In this thesis, the author finds that although the fiscal indicators shows Japanese fiscal situation is on the realm of collapsing,the possibility of breaking soverign debt crisis is not very high. Japanese government expenditure,whether in the form of public consumption or investment, did not promote economic growthgreatly.On the countrary, the large-scale government expenditure produes such high deficits and government debts.So it’s not proper to hold that fiscal expansion could definitely stimulate economic growth, still the social actual need and investment efficiency of the public works have to be considered. Although the government bailout for the financial institutions during the sub-mortgage crisis is the apparent cause for the high deficits for all developed countries, the structural factors are the underlying main reason for the fiscal imbalance.For China, special attention should be paid to issues like fiscal policy after crisis, expanding consumption via fiscal policy and local government debt.