Research To Expand Domestic Demand In Japan

"Expanding domestic demand" is a hot topic about Chinese economic development and policy issues in recent years, and it is also the important economic strategy and policy in Japan since late1970s. There are more than30years for Japan to expand domestic demand, however the effect is not significant. The economic between China and Japan is not entirely analogous, but these two East Asian economics have high similarity in the economic development path. This paper tries to explore the experience, features, polices and their effects about expanding domestic demand in Japan under the condition of long period and multi-dimension. Then summarized theoretically and provide references for China to expanding domestic demand.Based on a review of the relevant theoty about expanding domestic demand, the post-war Japanese domestic consumption is divided into three stages to discuss. The first stage is the economic recovery and high growth period (1945-1970). In this stage, the domestic consumption expanded gradually along with the economic growth, production and consumption, domestic demand and external demand went into a virtuous cycle track. The second stage is instability growth period (1971-1991). In this stage, domestic demand growth sluggish, and economic growth mainly rely on foreign demand. Consumption growth in the late1980s was largely caused by bubble economy. Also in this stage, Japanese government proposed the policy of expanding domestic demand. The third stage is the post-pubble economy period (1992-present). In this stage, the domestic consumption was in a long-term stagnation, two periods lowly recovery of economic were depended on the expand of external demand. The phenomenon of "Japan Sympton" becomes more seriously.The main conclusions of this paper and implications for China to expanding domestic demand including:First, domestic demand should be the goal of production, technological progress and industrial upgrading. Second, disposable income growth is the most important factor affecting domestic consumption, it is important for government to intervent the distribution of income and domestic demand growth in East Asian transplant market economy conditions. Third, in prone-economic countries and resource imbalance countries, there are bidirectional Granger effect between internal and external demands, therefore domestic demand,export and foreign investment should be expanded in the same time. Fourth, establish a moderate, sustainable social security system. Fifth, the wealth effection and consumer demand expansion generated by the asset appreciation are unsustainable, macroeconomic policies, especially monetary policy are important. It is necessary to form positive economic expection and prevent foam and deflation. Only integrating of the five policies and measures can form a long-term mechanism to promote the growth of domestic consumption.