TITLE:
The Sustainability of Japan’s Government Debt: A Review
AUTHORS:
Tomomi Miyazaki, Kazuki Onji
KEYWORDS:
Sustainability of Government Deficit, Deficit Gamble, Tipping Point of “Crisis, ” Home Bias, Coordination Problem
JOURNAL NAME:
Theoretical Economics Letters,
Vol.7 No.6,
September
15,
2017
ABSTRACT: This paper reviews the
literature on the sustainability of Japanese government debt/deficit. First, we
offer an overview of the approaches and the key findings on the sustainability
analysis. Second, we introduce the arguments of Hoshi and Ito [1], which they predict that foreign investors’ share
of JGBs could exceed beyond domestic ownership. Finally, we discuss the
coordination problem in the JGB market based on the findings of Onji et al. [2] that examine how
government withdrawal from the JGBs could roil the market.