Thursday, July 9, 2009

Noriko Hama, Paul Krugman, and a New Take on Stimulating Consumption

Daniel Gross has an interesting piece in Slate (it's here) about Noriko Hama, a Japanese economist who Gross says is stylistically and ideologically the female, Japanese analog of Paul Krugman (!).

What I gather from Gross's article is this: Hama has a unique perspective on the question of governmental encouragement of consumption (this has been one of my favorite policy issues to consider since the recession started, therefore my interest in the article).

Hama's take is that governments should try to stimulate consumption, but their focus should not be on domestically-produced products -- rather, each government should look at the economy from a global perspective and recognize that a rising tide would raise all ships:

The global economy needs to move from a SLICS (So Long as I Can Survive) mentality to a SLYCS (So Long as You Can Survive) mentality. Central banks and governments should worry less about stimulating domestic demand for domestic goods and more about stimulating demand for traded goods. Toyota workers should buy Nissan cars, and vice versa. "The U.S. has no business saying 'buy American'; it should be saying buy non-American," she said. "It's this kind of a huge mental leap that is actually required if we are going to move out of this situation we're in."

No comments:

Post a Comment