Japanese Economy

Fuse via Getty Images

What the Sheer Volume of Japan's Debt Really Means

Japan's net financial liabilities used to take it off the hook. However, they too have soared, and now stand well above Greece's, at 140 per cent, and rising. Many will argue that although these ratios seem impossibly high, the debt is mostly domestically owned, and thus not vulnerable to jittery foreign financial markets, currency fluctuations and the like.
Pete Ryan via Getty Images

Surprise of the Year: Hope Restored?

Pessimism is a hallmark of the post-crisis period, and it was with us for so long, we almost didn't notice. Confidence -- its polar opposite -- is one of those necessities that we take for granted. That is, until they are taken away. Without confidence, at best we cower in the shadows, coming out to carry on basic activities, and scurrying back for shelter. At worst, it causes the collapse of financial systems and the distribution of goods and services -- in a word, chaos. But this year, we regained something: hope.

Policy Will Drag on Economic Growth, But Not For Long

The bottom line? Fiscal policy is already a drag on growth, and will be, but perhaps not for as long as many now believe, given the speed with which fiscal dynamics can flip around. Monetary policy is generally expected to tighten, but in a way that does not undermine, but rather lend support to nascent economic growth.