Japanese Keynesianism and the Peculiarities of Its Evolution

DOI: 10.52340/ekonomisti.2025.03.03 Abstract The 20th century was a period of profound transformations for Japan, which affected both the country`s socio-economic life and the process of its understanding and reassessment. Since the beginning of the 20th century, Japan has gone through a complex and contradictory path from industrialisation at the beginning of the century to the "economic miracle" of the post-war period, to the structural crisis and depression of the 1990s, followed by the formation of a dynamically developing high-tech innovative economy. These processes were accompanied by the intensive development of economic science. Japanese economic thought absorbed both Western economic theories and traditional Eastern approaches and, on this basis, formed a unique theoretical space that influenced the country`s domestic policy and international science as well. In modern Japanese economic science, four main trends can be distinguished: neo-Keynesianism, neoliberalism, monetarism and conservatism. In this article, we will focus on the specifics of Japanese Keynesianism. As in Europe, Japanese Keynesianism began in the 1930s. It is noteworthy that Takahashi Korekiyo, who was the Japanese Finance Minister of that time, implemented policies in the 1930s that reflected Keynesian strategies, earning him the nickname "Japanese Keynesian". However, Japanese economists found it quite difficult to accept the basic idea of ​​the general theory. Nisaburo Kito believed that the core of the general theory was monetary analysis, based on the theory of liquidity preference. Ichiro Nakayama considered Keynes`s general theory in terms of general equilibrium theory. However, the 1930s in Japan were not a period of simple absorption and assimilation of J.M. Keynes`s general theory, and Yasuma Takata and Kei Shibata attempted to criticise Keynes. However, with the outbreak of the Pacific War in 1941, interest in Keynes declined. The end of World War II was followed by rapid economic growth in Japan, known as the "Japanese Economic Miracle." During this period, Japanese economists actively studied and applied Western economic theories, especially Keynesianism, to Japanese realities. The development of Japanese Keynesianism after World War II can be divided into four phases: the adaptation phase, the mature Keynesian phase, the crisis phase, and the Keynesian revival phase. In the 21st century, the Japanese economy faced unique challenges characterised by phenomena such as chronic deflation, an ageing population, stagnation, weak domestic demand, and others. By the beginning of the 21st century, the most important direction of Keynesian thinking in Japan was the development of zero-interest-rate stagnation models. One of the most prominent manifestations of modern Keynesianism is the so-called "Abenomics", that is, an economic program aimed at pulling the Japanese economy out of the crisis. However, the implementation of this program had both positive and negative consequences. Today, modern Japanese economists, such as Kazuo Nakanishi and Yoshitaka Fukuda, focus on adapting Keynesian theory to such challenges of the 21st century as population ageing, inequality, and the digitalisation of the economy.