New Paradigm in Macroeconomics: Solving the Riddle of Japanese Macroeconomic Performance

Modern mainstream economics is attracting an increasing number of critics of its high degree of abstraction and lack of relevance to economic reality. Economists are calling for a better reflection of the reality of imperfect information, the role of banks and credit markets, the mechanisms of economic growth, the role of institutions and the possibility that markets may not clear. While it is one thing to find flaws in current mainstream economics, it is another to offer an alternative paradigm which, can explain as much as the old, but can also account for the many 'anomalies'. That is what this book attempts. Since one of the biggest empirical challenges to the 'old' paradigm has been raised by the second largest economy in the world - Japan - this book puts the proposed 'new paradigm' to the severe test of the Japanese macroeconomic reality.

RICHARD A. WERNER is Professor of International Banking at the University of Southampton, UK. Previously, he was Reader at Southampton and Assistant Professor of Economics at Sophia University in Tokyo, Japan. He has spent over a decade in Asia, including at the Bank of Japan, the Japanese Ministry of Finance and the Asian Development Bank, and as Chief Economist of Jardine Fleming Securities (Asia) Ltd and asset allocator of a major pension fund. He is much quoted in the media and has published widely on financial markets and monetary economics. In 2003, he was selected as Global Leader for Tomorrow by the World Economic Forum in Davos.