In this short paper, we investigate fiscal sustainability under an aging population in Japan from a financial market perspective. First, we focus on self-fulfilling expectations in the bond market and point out the risks of a fiscal collapse triggered by a change in market expectations. Second,...

The LDP-New Komeito coalition government is currently promoting, under Prime Minister Abe, economic policies often dubbed gAbenomicsh which combines gthree policy arrows,h including gaggressive monetary relaxation,h gflexible fiscal policy,h and ggrowth strategy that encourages private sector...