Subject: Stimulating the Japanese Economy
From: Martin Feldstein (msfeldst@nber.org)
Date: Mon Jul 16 2001 - 15:39:15 EDT
I have written an article in today's Wall Street Journal suggesting what
the Japanese could do to stimulate their economy while doing the structural
reforms (that are likely to have the opposite effect.) The basic idea is
revenue neutral fiscal incentives for household spending and business
investment by modifying the value added tax (cut now, raise later) and
introducing a substantial investment tax credit (that would apply to
residential investment as well.) This could be revenue neutral if
accompanied by spending cuts or increases in personal and business taxes.
Reducing the uncertainty about future cuts in Social Security pension
benefits would also help.
The URL for the article is http://www.nber.org/feldstein/wj071601.html
marty feldstein
