After a decade of gloom, the sun seems at last to be shining brightly on Japan. Its economy has now grown at a respectable pace for four years and the clouds of deflation seem finally to have broken. International factors were the proximate cause of this improvement, but below the surface fundamental changes have also started to occur in the structure of the domestic economy. These changes are largely benign in nature, though they do raise questions about Japan's fiscal health, its ability to fund the twin US deficits, and the trajectory of its relations with its neighbors. The purpose of this speech is to explain how these dynamices will unfold and what they mean for Japan, East Asia, and the United States.

Robert Madsen is a Senior Fellow at MIT's Center for International Studies. He also advises such private equity firms as Unison Capital and the Robert M. Bass Group and was Asia Strategist at Soros Private Funds Management, which undertook leveraged buyouts and corporate restructuring in Europe and East Asia. From time to time he consults for several government agencies, including in the past year an economics ministry, a foreign ministry, an intelligence agency, and a central bank. Madsen graduated summa cum laude and Phi Beta Kappa from Harvard University's Department of East Asian Languages and Civilizations and then attended Oxford University as a Rhodes Scholar, where he earned a Masters Degree, with Distinction, and a Doctorate in International Relations. He additionally holds a J.D., with Distinction, from Stanford Law School and is a member of the California State Bar.