Conclusion

This paper has presented three questions about the Japanese economic policy and provided answers from the perspective of standard macro theory. The impact of fiscal policy on prices (Question 1) and the macro analysis of MMT (Question 2) are conducted by the mechanism by which government bonds are settled on the monetary base. On the other hand, in the answer to Question 3, public debt is analyzed on the assumption that government bonds and the monetary base are the same. However, government bonds are IOUs that do not have finality while the monetary base issued by the central bank have finality. Therefore, from the viewpoint of the economics of payments, the analysis of public debt by distinguishing between government bonds and the monetary base will be an issue for the future.