The Holy Grail of Macroeconomics and over one million other books are available for Amazon Kindle. Learn more
Qty:1
  • List Price: $50.00
  • Save: $10.36 (21%)
Only 4 left in stock (more on the way).
Ships from and sold by Amazon.com.
Gift-wrap available.
Add to Cart
Used: Good | Details
Sold by cmoran241
Condition: Used: Good
Comment: Several pages have creased corners; please note that this book has a small inventory sticker for FBA on the back side that may not come off easily
Access codes and supplements are not guaranteed with used items.
Add to Cart
Have one to sell? Sell on Amazon
Flip to back Flip to front
Listen Playing... Paused   You're listening to a sample of the Audible audio edition.
Learn more
See this image

The Holy Grail of Macroeconomics: Lessons from Japan's Great Recession Hardcover – May 4, 2009

ISBN-13: 978-0470823873 ISBN-10: 0470823879 Edition: 1st

Buy New
Price: $39.64
26 New from $37.09 37 Used from $3.34
Amazon Price New from Used from
Kindle
"Please retry"
Hardcover
"Please retry"
$39.64
$37.09 $3.34

Free%20Two-Day%20Shipping%20for%20College%20Students%20with%20Amazon%20Student



Frequently Bought Together

The Holy Grail of Macroeconomics: Lessons from Japan's Great Recession + Currency Wars: The Making of the Next Global Crisis
Price for both: $58.64

Buy the selected items together

NO_CONTENT_IN_FEATURE

Save up to 90% on Textbooks
Rent textbooks, buy textbooks, or get up to 80% back when you sell us your books. Shop Now

Product Details

  • Hardcover: 320 pages
  • Publisher: Wiley; 1st edition (May 4, 2009)
  • Language: English
  • ISBN-10: 0470823879
  • ISBN-13: 978-0470823873
  • Product Dimensions: 9.1 x 5.9 x 1.2 inches
  • Shipping Weight: 1.3 pounds (View shipping rates and policies)
  • Average Customer Review: 4.5 out of 5 stars  See all reviews (36 customer reviews)
  • Amazon Best Sellers Rank: #822,894 in Books (See Top 100 in Books)

Editorial Reviews

Review

"As I have noted before, the best analysis of what happened to Japan is by Richard Koo" (Financial Times, February 18th 2009)

From the Inside Flap

How did the great Depression of the 1930s get to be so bad for so long? That question has baffled economists for decades. Ben S. Bernanke, the current Fed Chairman, even called understanding the great Depression the as yet-unattained "holy Grail of Macroeconomics." Japan's Great recession of 1990-2005 finally gave us some vital clues as to how a post-bubble economy can plunge into prolonged recession while leaving conventional policy responses largely ineffective.

Building on the author's earlier work Balance Sheet Recession: Japan's Struggle with Uncharted Economics and its Global Implications (John Wiley, Singapore, 2003), The Holy Grail of Macroenomics: Lessons from Japan's Great Recession argues that there are actually two phases to an economy, the ordinary (or yang) phase, in which the private sector is maximizing profits, and the post-bubble (or yin) phase, in which private sector is minimizing debt, or repairing damaged balance sheets. Although conventional economics is useful in analyzing economies in the yang phase, it is less useful in explaining phenomena such as the "liquidity trap" that is typical of an economy in the yin phase. The distinction between the yin and yang phases also explains why some policies work well in some situations but not in others. Indeed, it offers the crucial foundation to macroeconomics that has been missing since the days of Keynes.

This groundbreaking book not only explains what happened to the U.S. during the Great Depression and to Japan during the Great recession, it also offers important policy recommendations for fighting post-bubble economic downturns in any country, including the current subprime crisis in the U.S.


More About the Author

Discover books, learn about writers, read author blogs, and more.

Customer Reviews

4.5 out of 5 stars
5 star
22
4 star
10
3 star
4
2 star
0
1 star
0
See all 36 customer reviews
This has become one of my favorite economics books I've read.
Thomas L. Bruce
This book is an excellent exercise in well structured logical argument and the clear concise communication of a complex subject.
Rob Julian
This was the catalyst to The Great Depression and to the recent Japanese recession, according to Koo.
investingbythebooks

Most Helpful Customer Reviews

50 of 52 people found the following review helpful By William Podmore on September 14, 2009
Format: Paperback
Richard Koo, chief economist of Tokyo's Nomura Research Institute, has written a fascinating and important book. He claims that capitalist economies have two phases: the ordinary phase, in which firms aim to maximise profits, and the post-bubble phase, when they aim to pay off their debts. He believes that he has found the missing link of economics: "corporate debt minimisation, therefore, is the long-overlooked micro-foundation of Keynesian macro-economics."

It's still boom and bust. Koo claims that in the boom phase, monetary policy works, but not fiscal; in the bust phase, only fiscal policy works, not monetary. He shows how monetary policy cannot fight a slump. He contends that only huge fiscal stimuli, government actions to boost domestic demand, can prevent slumps.

Koo claims that, in the 1930s depression, in Japan's recession since 1990, and in the present crisis, the problem was the private sector's lack of demand for loans, not a lack of funds from the central banks. Contrary to the consensus, these depressions were not caused by the wrong monetary policy.

How to fight a slump? Cutting spending to reduce government debt is the road to disaster. In the 1930s, both President Hoover and Chancellor Bruning insisted on balancing the budget, which crashed the US and German economies. In 1945 the British government's debt was 250% of GDP, but the country survived. Between 1933 and 1936, President Roosevelt raised government spending by 125%, so GDP rose by 48% and tax revenues rose by 100%. But in 1937 he changed tack and cut spending: industrial output fell by 33%.

Japan's recession (caused by falls in the value of its assets - land and loans) destroyed 1500 trillion yens' worth of wealth - three years of Japan's GDP.
Read more ›
7 Comments Was this review helpful to you? Yes No Sending feedback...
Thank you for your feedback. If this review is inappropriate, please let us know.
Sorry, we failed to record your vote. Please try again
11 of 11 people found the following review helpful By A. Menon on October 22, 2009
Format: Paperback Verified Purchase
This book is a good account of the phenomenon of debt aversion. The thesis of the book is pretty straightforward and is that, after asset bubbles burst and businesses are technically insolvent through liquidation analysis, they are likely to pay down debt irrespective of monetary policy. The fact that the businesses are technically insolvent despite market prices is described as being a function of information asymmetry and bank incentives.

This realization is deemed to be the missing link to complete economist's understanding of how to bridge fiscal macroeconomic thought and monetary economic thought and the solutions required in the aftermath of a burst asset bubble. Discussing the shortfalls of Friedman's positions on the demand function for money to be a function of nominal interest rates, it is argued that when one is in the position of being insolvent yet operational, the focus shifts from using lending lines to maximise ROE to using free cashflow to minimize the debt that is causing this insolvency. When this market regime is upon us, it is the need of the government to use fiscal policy to fund the output gap.

I think this is pretty accurate as an analysis of the problems that arise in monetary policy when the world is in fear of the phenomenon that hurt them (being burdened with debt that is greater relative to the asset base one had assumed would back it) and this aversion has macroeconomic repurcussions. My only criticism is, I dont think this is as obscure a result as is described. Most ecnomists realize how output gaps can arise, how debt aversion can form. Richard Posner, who is a judge, talks about debt aversion off-hand as though its well known. So all in all i think its a god perscriptive piece on a very real phenomenon we deal with but its not revolutionary and this phenomenon is discussed by others (though few have gone in to as much detail about it).
1 Comment Was this review helpful to you? Yes No Sending feedback...
Thank you for your feedback. If this review is inappropriate, please let us know.
Sorry, we failed to record your vote. Please try again
15 of 17 people found the following review helpful By Roger on August 31, 2009
Format: Paperback Verified Purchase
I am a neophyte in economics, I should have put my attention hear years ago -- being a "do gooder" at heart. The past three months I have delved into the dismal science. I never anticipated such divergence of opinions and theories. The Holy Grail of Macroeconomics is simply a gem of knowledge. Of the many books/texts I have aquired, this one is the best in gaining the meat. I mean by this, it is written in a dense style, reminisent of college texts years gone by -- yet each paragraph holds my attention and interest, unlike so many others. The author's analysis and view points are clearly stated with ample examples and "evidence." This fine writting is simply not of the "dismal science" but a wonder of clear analysis and clarity of writting.
Comment Was this review helpful to you? Yes No Sending feedback...
Thank you for your feedback. If this review is inappropriate, please let us know.
Sorry, we failed to record your vote. Please try again
7 of 7 people found the following review helpful By David Robertus on January 11, 2011
Format: Paperback
I was trained as a Chicago school quantitative economist, left that school of thought after studying Galbraith and realizing the scale of the holes in the neo-classical method. After reading Koo, I don't have a name for my school of economic thought, but if Krugman won it, then Koo should be a shoo in. This book puts together the defects in Keynes and the monetarist theories for an inclusive new explanation for economic behavior.
Comment Was this review helpful to you? Yes No Sending feedback...
Thank you for your feedback. If this review is inappropriate, please let us know.
Sorry, we failed to record your vote. Please try again
34 of 44 people found the following review helpful By James East VINE VOICE on July 22, 2008
Format: Hardcover
At the risk of getting taken to the wood shed by both Academics and Economists, I will venture out and provide a few comments from the view of an aspiring autodidact.

First, I would like to commend both the author and editor on a good job in the editing process, as this translation reads and flows like an English first edition. Second and as for the subject matter, the thesis is well documented and one would have a hard time to find fault with its premise. However, I will take issue with two minor points (A & B below) of which I hope will expose a small point for possible improvement and betterment for the "search of the holy grail" that hopefully in the end, may actually boost the thesis.

At issue, and from page 108 "we must conclude that the Great Depression was 13.6 percent a credit supply problem and 86.4 percent a credit demand problem."

A) I am very surprised that any discussion about the Great Depression would not even mention the Smoot-Hawley Tariff Act of 1930, which started moving thru congress the year before in 1929. Some have previously argued that this legislation started the intial cracks in the stock market before it eventually broke in October. In addition, and a very important consequence of this act was what subsequently happened to world trade and its subsequent higher retaliatory tariffs from around the world after it became law. As the US economy moved thru the next 2 years, many more tariffs were increased even after its original passage into law all thru and up until the 1932 elections at which point the winning candidate ran on a non-Nationalistic platform (i.e. on a reduced tariff platform). Why is this so relevant?
Read more ›
11 Comments Was this review helpful to you? Yes No Sending feedback...
Thank you for your feedback. If this review is inappropriate, please let us know.
Sorry, we failed to record your vote. Please try again

Customer Images

Most Recent Customer Reviews

Search