Book contents
- Frontmatter
- Contents
- Foreword by Richard R. West
- Preface
- List of contributors
- 1 Beyond trade friction: an overview
- Part I Macroeconomic policy issues
- 2 Japan and the United States: the need to prosper together
- 3 Internationalization and restructuring of the Japanese economy
- 4 The limits of monetary coordination as exchange rate policy
- Part II Commercial policy issues
- Part III Financial integration issues
- Index
2 - Japan and the United States: the need to prosper together
Published online by Cambridge University Press: 22 March 2010
- Frontmatter
- Contents
- Foreword by Richard R. West
- Preface
- List of contributors
- 1 Beyond trade friction: an overview
- Part I Macroeconomic policy issues
- 2 Japan and the United States: the need to prosper together
- 3 Internationalization and restructuring of the Japanese economy
- 4 The limits of monetary coordination as exchange rate policy
- Part II Commercial policy issues
- Part III Financial integration issues
- Index
Summary
In seeing the extraordinary growth that has occurred in Japan, American economists are able to learn a good deal about the way an economy should function. In fact, we would like to see the American economy do more of what the Japanese economy has done. Indeed, I suspect that the pressures now evident in world markets are going to force the American and Japanese economies to integrate substantially.
In a sense, we are being pressured to move ever closer together largely because of our key positions in the world trading system and also because of the growing accumulation of dollar-denominated assets by Japan's government institutions, its private financial institutions, and its citizens. If there continues to be, as we all seem to expect, a sizable accumulation of external assets by Japan and a correspondingly sharp deterioration in the external position of the United States, it is inevitable that Japan's accumulation of dollar-denominated assets will be very large. With an annual accumulation on the order of §50 billion, an increasing amount is bound to be direct investment, even though a substantial part continues to be portfolio investment, either in U.S. treasury securities or in private issues. I suspect that as Japan's involvement in the United States economy grows, Japan will have as much difficulty integrating its economic system into the United States as we in the United States had in managing our substantial direct foreign investments, which we initiated in Europe and throughout the rest of the world in the 1960s and early 1970s.
- Type
- Chapter
- Information
- Beyond Trade FrictionJapan-US Economic Relations, pp. 23 - 30Publisher: Cambridge University PressPrint publication year: 1989