Japanese macroeconomic policy is getting muddled

Logic of government's personal tax cut plan is hard to understand

Masaaki Shirakawa

December 4, 2023 05:00 JST

20231201 Bank of japan

Bank of Japan headquarters in Tokyo: The effects of monetary policy on the government as a borrower should be considered. © Reuters

Masaaki Shirakawa is a distinguished guest professor at Aoyama Gakuin University in Tokyo and a former governor of the Bank of Japan.

The most puzzling policy to emerge in Japan over the past decade, in terms of macroeconomic logic, is the recent announcement that the government intends to cut personal income taxes.

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