Sweden's Path, Not Japan's, Can Guide Cleanup
Professor Takeo Hoshi quoted in The Wall Street Journal
12/02/2008
Brenda Cronin,
The Wall Street Journal
"In tackling the national economic downturn, President-elect Barack Obama and his newly appointed economic team might want to study how Japan and Sweden weathered similar storms during the 1990s.
Sweden's response to its crisis is widely considered a model. The Swedish government and central bank in 1992 quickly stabilized the krona and reversed contractions in gross domestic product and a rising unemployment rate by allowing some banks to fail, recapitalizing others and isolating bad assets. In two years, the country's economy was growing again.
Tokyo's piecemeal steps, meanwhile, ushered in a "lost decade." The economy stagnated until zombie banks propped up by the government finally succumbed..."
Click here to read the full article.
Related Links
Professor Hoshi's faculty bio
"Japan's 'lost decade' pushes US to overcorrection: analysts" from Google News.
