Post-COVID-19 Japan: A Political Economy Treatise on Shocks and Therapy
Professor and former Chair, Department of Economics; Professor and Founding Chair, Department of Japanese Studies, University of Dhaka, Bangladesh.
Pandemic is a rare than usual event, and therefore, the shocking impacts of pandemic fall under the category of “uncertainty’’ than “risks”; “uncertainty” is improbabilistic and, therefore, not amenable to predictability. This paper aims at understanding the political economy essence of the shocks experienced by Japan during the post-COVID-19 pandemic and devise plausible therapy to address those shocks. The paper follows a logical order: it starts with a delineation of the foundational methodological principles of political economy, followed by an analysis of the rise and fall of Japan’s developmental miracle. It then traces the nature of critical shocks faced by the Japanese economy and society due to COVID-19. We found five specific interrelated and interdependent shocks of the social body – the “multiple organ social-economic physical complications” (MOSEPC) – (1) diseases of falling GDP and growth, (2) diseases of rising real unemployment, (3) diseases of increasing inequality, the concentration of wealth in few hands, multidimensional poverty, and creation of “new poor”, (4) diseases of deteriorating physical and mental health- depression, distress, destitution, deprivation, stress, family disruption- dissolution-rift-conflicts, and (5) diseases of increasing disrespect to people’s fundamental rights. Finally, the paper proposes a “V-plus shaped therapy” for Japan as a way out from the multidimensional shocks of COVID-19. This paper argues that the proposed “V-plus shaped therapy” could be helpful, as a socio-economic policy vision, for most countries affected by the COVID-19 during the time of concurrent economic slowdown. The “V-plus-shaped shock therapy’’ for Japan necessitates adopting four different interventions simultaneously, namely the austerity-led “expenditure cutting”, “debt restructuring”, “redistribution of wealth from rich to poor”, and “printing money if necessary”. The appropriate mix of interventions to reach a good equilibrium of deflationary and inflationary cycles would matter the most.
Keywords Economic development of Japan. Japan’s economic growth. Political economy. Macroeconomy and institutions. General welfare and well-being. Financial markets and Macroeconomy. Macroeconomic policy. Business cycle. Occupational choice. Labour discrimination. Inequality and poverty. Political processes- rent-seeking. Social economics. Economic methodology. COVID shocks. Post-COVID therapy. Post pandemic Japanese economy and society. Heterodox approach in understanding economy. Economic methodology.
JEL Classification B5 . B41 . B55 . D63 . D72 . E6 . E02. E32. E44 . F54 . I31 . J24 .J71 . O11. O15 . O43 . O53 . P16