This volume explores fundamental macroeconomic and financial issues of today from fresh perspectives. Bringing together leading scholars and practitioners in the fields, it analyzes the light that the recent crisis has shed on the global macro economy, sectoral structure and financial architecture, and proposes policies needed to address systemic financial risks and foster a sustainable growth. It also explores the measurement of economic and social progress in our societies, and proposes new frameworks to integrate economic dimensions with other aspects of human wellbeing. This volume provides valuable suggestions for how to foster robust recovery from the crisis, and how to prevent its recurrence.

This book explores why different patterns of economic development and growth have been observed across different regions and over time. Drawing on the contributions of outstanding scholars in comparative and historical institutional analysis, this volume presents the roles of political institutions, social organizations and norms, culture, and policy in economic development and societal evolution. The contributors include, besides the editors, G. Austin, A. Greif, D. Ma, T. Khanna, J.L. Rosenthal, C.H. Shiue, J. Svenjinar, P. Temmin, R.B. Wong, and others. The volume provides a valuable resource for general readers, academics, and policymakers with an interest in the future of the evolving world economy.

This volume explores how complex economic transactions can be treated in economics, as well as how societies bring order to complex economic and social transactions through various institutional devices. Bringing together eminent scholars from the fields of game theory, complexity, econometrics and law, it explores theoretically and empirically how markets, social norms, and corporate organization and governance evolve, and how these institutions affect economic behavior. The contributors include, besides the editors, S. Cincotti, M. Gallegatti, M. Kandori, K. Pistor, B. Skyrms, R. Sugden, and others.

Recent academic papers have shown that the Japanese sovereign debt situation is not sustainable. The puzzle is that the bond rate has remained low and stable. Some suggest that the low yield can be explained by domestic residents’ willingness to hold Japanese government bonds (JGBs) despite its low return, and that as long as domestic residents remain home-biased, the JGBs are sustainable. About 95% of JGBs are currently owned by domestic residents. This paper argues that even with such dominance of domestic investors, if the amount of government debt breaches the ceiling imposed by the domestic private sector financial assets, the JGB rates can rapidly rise and the Japanese government can face difficulty rolling over the existing debt. A simulation is conducted on future paths of household saving and fiscal situations to show that the ceiling would be breached in the next 10 years or so without a drastic fiscal consolidation. This paper also shows that the government debt can be kept under the ceiling with sufficiently large tax increases. The JGB yields can rise even before the ceiling is hit, if the expectation of such drastic fiscal consolidation disappears. This paper points out several possible triggers for such a change in expectation. However, downgrading of JGBs by credit rating agencies is not likely to be a trigger, since past downgrades have not produced any change in the JGB yield. If and when the JGB rates rapidly rise, the Japanese financial institutions that hold a large amount of JGBs will sustain losses and the economy will suffer from fiscal austerity, financial instability, and inflation.