| [Introduction of Minus Interest Rate]
Interest rate on loans must correspond to nominal economic growth rate.
Preface
Japanese economy still doesn’t show signs of full-scale economic recovery,
as [Recession] has been said for a long time. When in the world will Japanese
economy recover?
Why did economy be weakened in the first place?
[Economy has been weakened because of the bubble burst.].
It is frequently-heard expression. Why does economy be weakened by bubble
burst?
Disposal of bad debt is hardly completed. As somehow new bad debts occur
continuously, although banks dispose of bad debts so hard. Why do bad debts
continue to increase?
These situations can’t be explained by classical economic theory. Because
there is no theory suitable for Japanese economic situation. The reason
is simple. There are deficits in conventional economic theory because consideration
is insufficient. As a result, all economic phenomena can’t be explained
correctly.
Prime example is interest rate. Clear definition of interest rate doesn’t exist.
[Interest rate is plus] is basic premise of economic theory, but why interest
rate must be plus? How on earth interest rate should be decided. Such important
points have not been considered sufficiently.
Interest rate is defined clearly with consideration of essential meaning
of money in this book. As a result, it is understood that interest rate
can be both plus and minus. And it is easily understood that the policy
to recover present Japanese economy is only [Introduction of minus interest
rate].
Please understand essence of problems happening in present Japanese economy
to understand essence of interest rate through this book, and acknowledge
there is no policy other than [Introduction of minus interest rate]. And
there is an increased chance to realize [minus interest rate] as real policy.
Japanese economy will recover if it is realized.
June 2003.
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