PSU Center for Japanese Studies Presents Professor Takatoshi Ito, Columbia University
A bowl of Ramen costs 4 times more in New York than in Tokyo. The difference is almost the same for a Big Mac. Even more pronounced, the tuition of a comparable research university is 17 times more in New York than in Tokyo. This lecture will describe how “cheap” goods and services like these are in Japan compared to the United States. Why is this the case? Explanations vary.
In 2022 and 2023, the yen depreciated a lot, and the inflation rate in the US was higher than in Japan. Japan became doubly cheaper. Some blame the Bank of Japan for keeping its interest rate low when the Federal Reserve hiked it sharply during those years. The yen depreciated from 115 yen in January 2022 to 145 yen that Fall and stayed around 140-145 since then. Others blame the Ministry of Finance, which has jurisdiction over the exchange rate policy, for not stopping yen deprecation by intervention earlier. Another group blames Japan’s lack of productivity increases that would enable exports to soar with cheaper goods and service prices in Japan.
This lecture will show how monetary policy, exchange rate policy, and innovation policy interact to generate the "Cheap Japan" phenomenon.
Takatoshi Ito, Professor, School of International and Public Affairs, Columbia University, & Adjunct Professor at GRIPS Tokyo, has taught extensively both in the United States and Japan since finishing his Ph.D. in economics at Harvard University in 1979. he was President of the Japanese Economic Association in 2004. Ito also served as a member of the Prime Minister’s Council on Economic and Fiscal Policy, 2006-08. He is an author of Japanese Economy, 2nd Edition, and many other books and journal articles. He was awarded the National Medal with Purple Ribbon for his excellent academic achievement.