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The Holy Grail of Macroeconomics: Lessons from Japan's Great Recession
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The Holy Grail of Macroeconomics: Lessons from Japan's Great Recession

4.1  ·  Rating Details ·  193 Ratings  ·  19 Reviews
Japan's "Great Recession" lasted from approximately 1992 - 2007 and finally provided the economics profession with the necessary background to understand what actually happened during the US recession of the 1930s. The discoveries made, however, are so far-reaching that a large portion of economics literature will have to be modified to accommodate another half to the ...more
Hardcover, 296 pages
Published August 1st 2008 by John Wiley & Sons (first published July 15th 2008)
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Jul 14, 2015 Owlseyes marked it as to-read
Shelves: economy, europe, euro

(Jan 21, 2015) As the ECB gathers for a meeting, many speculate on its next steps; some doubt the euro can be saved. Koo is very skeptical about this one single step: “buying debt”.

In a recent interview to the Portuguese newspaper Publico he made some interesting considerations:

(1) Europe is going through a phase like Japan had been in: recession. Buying debt by ECB; this impacts only in the markets, the real economy won’t be saved, says Koo.

(2) There should be solutions at governments’ leve
Oct 17, 2009 AC rated it really liked it
Shelves: markets, japan
(I have upgrade my review -- not because the book, as such, has improved -- it is basically an article masquerading as a book -- but only because the thesis has become a part of my mental furniture)

Good thesis -- mediocre book. Took an hour to browse it. Basically...

Unlike typical recessions, which (like 1990/91) are due to credit crunches, and which can be 'solved' by forcing liquidity into the banking system; the Japanese recession of 1990-2005, like the Great Depression of 1929-1932 are "bala
Aug 15, 2012 Bryan rated it it was ok
If you're into this kind of stuff, this book is a good read. If not, it would be as dry as a mouthful of crunchy October leaves from your backyard. Not dry like humor can be dry, because there is no humor involved (of course, why would there be?), but again, dry like a mouthful of crunchy October leaves.

I'm into this kind of stuff, and yet I give it only 2 stars--the "it was OK" rating, for which I have plenty of reasons, in addition to it's lack of flavor, style, or the presence of a creative e
Apr 25, 2013 Chris rated it it was amazing  ·  review of another edition
A fascinating book that seeks to explain how and why certain types of recessions--those caused by a massive asset bubble bursts, which result in "debt overhang"--are so much more damaging than the ordinary recessions of the business cycle.

Koo's thesis is interesting, and if borne out, provides a possible micro-foundation for macroeconomics: That after a massive asset-price bubble (in housing, corporate debt, or whatever) bursts, a large number of private firms and households shift from a pure pr
David Robertus
Jun 22, 2010 David Robertus rated it it was amazing
Two chapters into it I had fundamentally changed my understanding of macro-economics plugging a myriad of gaps. I predict Koo will win the Nobel Prize
May 22, 2009 Matthew rated it really liked it
Shelves: economics
Long review follows -- its really a blog post of what I think would be Koo's implicit analysis of the GFC'08. One-word review of book -- excellent. Clearly written and argued, provocatively synthesizes the debate between fiscal and monetary policy, and throws in some tangential but provocative economic ideas to boot. My only complaint is he gives too little weight to the influence of Japan's zombie banks in the Jap recession -- he argues, implicitly, that zombie banks didn't matter, and I'd ...more
Emily Zhang
Oct 03, 2016 Emily Zhang rated it really liked it
Thorough and knowledgeable overview of long Japan recession - learned a lot. First 5-6 chapters definitely more useful / interesting than the last couple.
Jake Losh
Apr 23, 2016 Jake Losh rated it really liked it
This is a very good book and a very timely one. I first added this book to my reading list in 2009, having read about Koo from Krugman Paul and on FT Alphaville, among other places. On one hand, I'm sorry I didn't read it back in 2009 because much of what Koo discusses is quite prescient. On the other hand, I'm almost glad I didn't because it would have been so heartbreaking to watch policy makers fumble so badly while knowing the answers Koo shares in this book.

The basic argument goes like this
Clement Ting
Jan 06, 2014 Clement Ting rated it it was amazing
This book made me realized that my 3 year Economic degree was a huge waste of time. Applying my understanding to the concept of this book was simple because the author was kind enough to make some rather repetitive and naggish comments about the economy which I find easy in connecting the dots.

More importantly, the book has taught me on the various recessions that could possibly happen whilst my university only taught me of one type, (THE) Recession. It has also gave me new insight on why certai
Dec 12, 2010 Minger is currently reading it
Richard Koo is a mysterious fellow. He has a Chinese name, works for a Japanese bank and has worked for the Fed. Koo's gift to us is his ability to bridge different cultures with his economic insight. The French didn't accept hamburgers until their own chefs brought it back with them from the States. Will we accept Koo's diagnosis of our current malaise as a balance sheet recession similar to Japan's? The book is so lucid and compelling -- in economic, illustration and language -- that ...more
Dec 15, 2014 Drew rated it it was amazing
While the title lacks in humility the work that follows is unparalleled. Koo's research into the ails of the Japanese economy are important for anyone that is concerned about the destructive power of deflation. His work is topical and highly relevant.
Feb 03, 2014 Matthew rated it liked it
It's a very detailed account of Japanese's economic crisis. The writing style was a bit dry though.
Vincent Tan
Mar 06, 2013 Vincent Tan rated it really liked it  ·  review of another edition
Shelves: favorites
One of the best analyses of the Great Depression and the Japanese lost decade. A bit wonkish but brilliant nonetheless.
George Jankovic
May 07, 2016 George Jankovic rated it it was amazing
An analysis of the great Japanese recession from 1989 till pretty mich today. The author explains it by using a concept of a "balance sheet recession".
Mar 10, 2012 Squawk rated it it was amazing
Amazing book!! It offers a completely new, relevant view on Macroeconomics.

It would not be surprising to see this cause a paradigm shift, not seen since Friedman or Keynes.
David rated it liked it
Nov 07, 2011
A Anders
A Anders rated it really liked it
Mar 29, 2013
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Oct 14, 2016
Naicha rated it really liked it
Aug 27, 2012
Weibo  Xiong
Weibo Xiong rated it really liked it
Oct 29, 2016
Steven Rosenblum
Steven Rosenblum rated it liked it
Oct 07, 2014
Ian McBane
Ian McBane rated it it was amazing
May 28, 2016
Mona Zhang
Mona Zhang rated it liked it
Jul 13, 2014
Jeff Seymour
Apr 07, 2013 Jeff Seymour rated it it was amazing
A must read for investors. The originator of the phrase "Balance Sheet Recession".
Ligang Wang
Ligang Wang rated it it was amazing
Jul 18, 2014
Blair rated it it was amazing
Jun 17, 2012
Wayne Y.
Wayne Y. rated it it was amazing
Sep 12, 2016
Lakshmikanth Reddy
Lakshmikanth Reddy rated it it was amazing
Apr 27, 2013
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Jul 12, 2016
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Jun 05, 2013
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Richard Koo (born 1954) is Taiwanese American economist. He is chief economist at the Nomura Research Institute in Japan.

He studied at the University of California, Berkeley and Johns Hopkins University, where he got his PhD.
More about Richard C. Koo...

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