Revitalizing the Japanese Economy by Socializing Risk

26 Pages Posted: 19 Dec 2010 Last revised: 19 Feb 2011

Charles Yuji Horioka

Asian Growth Research Institute; National Bureau of Economic Research (NBER); Osaka University - Institute of Social and Economic Research (ISER)

Reiko Kanda

National Institute for Research Advancement (NIRA)

Date Written: December 5, 2010

Abstract

The almost continuous stagnation of the Japanese economy for the past two decades has had an adverse impact on Japanese households from at least three perspectives: A decline in the standard of living, an increase in risks and uncertainties relating to livelihood, employment, old age, etc., and an increase in income inequality. The majority of economists and policymakers focus their attention on the increase in income inequality. The research discussed here, however, focuses on the increase in risk and uncertainty among households and individuals. Based on this research, we propose a shift to a policy regime centering on the socialization of risk, which will make possible a transition from a society in which individuals bear excessive risks to one in which risk is shared equitably by society as a whole.

Keywords: Japanese economy, Policy regimes, Liberal regime, Social democratic regime, Conservative regime, Economic risks, Risk-coping mechanisms, Risk sharing, Socialization of risk, Social welfare, Redistribution, Government expenditures, Income gap, Income disparities, Income inequalities, Discrimination

JEL Classification: G20, H11, H50, I38, J08, J70, P10, P51

Suggested Citation

Horioka, Charles Yuji and Kanda, Reiko, Revitalizing the Japanese Economy by Socializing Risk (December 5, 2010). ISER Discussion Paper No. 799. Available at SSRN: https://ssrn.com/abstract=1721324 or http://dx.doi.org/10.2139/ssrn.1721324

Charles Yuji Horioka (Contact Author)

Asian Growth Research Institute ( email )

11-4, Ohtemachi, Kokurakita-ku
Kitakyushu, Fukuoka 803-0814
Japan

HOME PAGE: http://www.agi.or.jp

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Osaka University - Institute of Social and Economic Research (ISER) ( email )

6-1 Mihogaoka
Ibaraki, Osaka 567-0047
Japan

Reiko Kanda

National Institute for Research Advancement (NIRA) ( email )

Tokyo 150-6034
Japan

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