Revisit to 'Fundamental Re-Examination of Keynesian Economics and Monetarism As Portfolio Adjustment Theories : ' Recent Japanese Macroeconomic Data Too Suggest the Advisability of Dismissing the Stock Approaches to the Quantity Theory of Money and Also of Its Reconstruction According to a Flow Approach Based Upon Stable Expectations for Nominal Income

In his 2016 paper, Wakabayashi argues:(a) that old Keynesian economics, monetarism, and new Keynesian economics are all equally portfolio adjustment theories, or “stock” approaches to the quantity theory of money; (b) that post-war mainstream macroeconomics has been basically such portfolio adjustment theories; (c) that dead contrary to their prediction, liquidity preference was in truth exceedingly weak both in the Great Depression and the Great Recession; and (d) that macroeconomics must be reconstructed according to an “income-based flow” approach to the quantity theory, which he names the long-term target income hypothesis. Indeed, as a result of the continuation of the new Keynesian/monetarist policy-regime, the U.S. economy has deservedly been in stagnation: its per capita real GDP had grown merely by 6.4 per cent between 2007 and 2017, from 49,300 to 52,444 dollars in 2009 prices, or to put it differently, its annual growth rate in this respect had been confined to significantly less than 0.7 per cent for the decade. Thus, we may rightly think that the U.S. economy has in reality been Japanized. No wonder, that country has elected a very queer old gentleman as President; and has launched indecent wars against Central American illegal immigrants and world free trade. This paper re-examines the validity of portfolio adjustment theories in relation to so-called Japans' lost two decades; and draws exactly the same conclusion as Wakabayashi's 2016 paper does: only the long-term target income hypothesis can accurately depict the true macroeconomic mechanism of the modern capitalist economy