Japan's Keynesian Mirage: How Debt, Inflation, & A Collapsing Yen Expose A Failed Model

Japan's Keynesian Mirage: How Debt, Inflation, & A Collapsing Yen Expose A Failed Model Authored by Daniel Lacalle, Japan’s yen crisis exposes the long‑running failure of the Keynesian strategy that has dominated the country’s economic policy: chronic deficits, exploding public debt, and engineered inflation are now eroding Japan’s purchasing power, competitiveness, and monetary stability. For decades, many mainstream analysts pointed to Japan as proof that a rich, “monetarily sovereign” country could keep an extremely high public debt without relevant consequences. The argument was simple: as long as the state can issue its currency, it can always print whatever is needed to cover deficits, refinance debt,...

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