Asia Needs A New Economic Model

Can it be that Japan is slipping back into recession? The odds are still against it, but it now appears possible. The timing could not be worse. A major currency crisis is roiling through Asia that will have a significant deflationary impact. Japan's renewed weakness now threatens to throw much of the Pacific Rim into serious trouble. It is time for Tokyo to move beyond simply deregulating the financial sector to opening up the entire economy. And Prime Minister Ryutaro Hashimoto should seriously consider a major downsizing of Japan's enormous bureaucracy. The huge savings would allow for a major cut in taxes that would stimulate consumer spending.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.