Comment on “Recursive expectations approach in policymaking” by Professor Keiichiro Kobayashi

Tomomi Miyazaki

International Journal of Economic Policy Studies, 2023, vol. 17, issue 2, No 4, 399-402

Abstract: Abstract Professor Keiichiro Kobayashi discusses the relationship between recursive thinking (the ability to think about what others are thinking) and policy making in Japan in his paper “Recursive Expectations Approach in Policymaking” (Kobayashi in Int J Econ Policy Stud, 2023). It would be difficult to streamline a deeply entrenched system by relinquishing some other rules that have historically functioned well within an organization. Thus, the vertically divided administration within the bureaucratic system, which hampers recursive thinking of policy makers, is hard to be reformed. I propose that both fiscal rules and an independent fiscal institution (IFI) are recommended in Japan not only as a commitment device to make fiscal policy sustainable in the long-run but also as a measure to curb the negative effects caused by the lack of recursive thinking of policy makers.

Keywords: Recursive thinking; Sectionalism; Commitment device (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s42495-023-00116-w

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