This panel will discuss the economic crisis from the coronavirus pandemic and the recovery strategy for Japan. How does COVID-19 change the economic outlook in Japan? Does a relatively high rate of corporate savings in major Japanese firms put them in a better position than their foreign rivals? Will Japan’s large government debt and limited capacity for fiscal expansion constrain the recovery process?
The study presented in this webinar revisits optimal fiscal policies in response to population ageing by introducing an age-dependent increasing risk aversion assumption into an OLG model with risk-sensitive preferences to factor in the welfare cost of the policy-induced uncertainties.