Knowledge@wharton

Newly elected Prime Minister Shinzo Abe wants to take Japan’s economy in a daring new direction to end 20 years of stagnation and deflation. His policies resemble past efforts -- but with far more firepower behind them. That means even looser monetary policies and a sharp rise in government spending to boost demand. Some analysts say it’s just the medicine Japan needs and on the spending side at least the opposite of what Europe and the U.S. are doing. But Wharton finance professor Franklin Allen in an interview with Knowledge at Wharton says the plan carries serious risks and could lead to a big meltdown. (Video with transcript) See acast.com/privacy for privacy and opt-out information.