The Biggest Economic Policy Story In The World Is Happening In Japan

I wrote at the end of the November about Shinzo Abe's prospects for shaking Japan out of its economic dolrums, and since Election Day in Japan it seems to be working. The yen's been falling on rumors of monetary easing, and the Nikkei put up a week of gains. Then there were two days of givebacks but Christmas and today have seen a return to form—yen falling, Nikkei rising with Abe officially sworn in today and making it clear that he will force the Bank of Japan to ease and produce inflation if necessary. Scanning Google News I note that most of the western press is focusing on Abe's hawkish foreign policy views rather than his dovish monetary ones. To get a bit speculative, I think there may be a conncection here. Observationally, it seems that fat and happy political establishments have an irrational preference for slow growth, tight money, and balanced budgets. From time to time she...