The Role of Preconceived Ideas in Macroeconomic Policy: Japan's Experiences in the Two Deflationary Periods

Koichi Hamada () and Asahi Noguchi ()
Additional contact information
Koichi Hamada: Economic Growth Center, Yale University
Asahi Noguchi: Senshu University

Working Papers from Economic Growth Center, Yale University

Abstract: This paper examines the role of misleading economic ideas that most likely promoted the economic disasters of the two deflationary periods in Japanese economic history. Misleading ideas deepened the depression during the interwar years, and erroneous thinking prolonged the stagnation of the Japanese economy since the 1990s. While the current framework of political economy is based on the self-interests of political agents as well as of voters, we highlight the role of ideas in policy making, in particular, in the field of macro-economy where the incidence of a particular policy is not clear to the public. Using two significant examples, this paper illustrates the role of preconceived ideas, in contrast to economic interests, that dominantly influenced economic policy making.

Keywords: Preconceived ideas; perception on economic mechanism; vested interests; great depression; deflation in contemporary Japan (search for similar items in EconPapers)
JEL-codes: B2 F4 N2 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2005-03
New Economics Papers: this item is included in nep-dev, nep-mac, nep-pol and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.econ.yale.edu/growth_pdf/cdp908.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:egc:wpaper:908

Access Statistics for this paper

More papers in Working Papers from Economic Growth Center, Yale University Contact information at EDIRC.
Bibliographic data for series maintained by Benjamin King ( this e-mail address is bad, please contact ).