Download or read book The Impact of Fiscal Consolidation and Structural Reformson Growth in Japan written by Pelin Berkmen and published by International Monetary Fund. This book was released on 2011-01-01 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: With Japan’s public debt reaching historical levels, the need for fiscal consolidation and structural reforms have increased. As fiscal consolidation will require a sustained and large adjustment in the fiscal balance, its growth effect is a concern particularly for the short run. This paper uses the IMF’s Global Integrated Monetary and Fiscal Model to analyze the growth impact of fiscal consolidation and structural reforms. Although fiscal consolidation has short-term costs, the potential long-term benefits are considerable, and reforms that raise potential growth could support consolidation. Simulations show that the external environment also matters but domestic policies should be the priority.