Japan's Public Debt Management: New Developments

Abstract

1. New issues of government bonds in quantities: On the bond market, the period after 1975 has generally been characterized as one in which of government bonds were issued. Indeed, after 1975 large quantities of government bonds appeared on the bond market, judging from all indicators such as the amount issued, the government's dependence on bond finance, and the ratio of outstanding public debt to GNP. But it is necessary to ask what we really mean when we say that government bonds were issued in large quantities. It is true that the issuings were unmistakably with regard to the quantitative scale. However, this by itself is insufficient in determining whether the issuings were or not. For example, the amount of government bonds issued after 1975 may not necessarily be when compared with the balance between saving and investment. A look at the flow-of-funds table reveals that while the household sector continued to show a surplus, the shortage in the cor...