Annual Report on the Japanese

Economy and Public Finance

2001-2002

- No Gains without Reforms II -

November 2002

Cabinet Office

Government of Japan


[Annual List]

CONTENTS

Annual Report on Japan's Economy and Public Finance 2001-2002

Introduction

Chapter 1 Overview of the Capacity for Economic Recovery

   Section 1 Background of the Bottoming out of the Economy

      1. Bottoming out of the Economy

      2. Current State of Deflation

   Section 2 Behavior of the Corporate, Banking, and Household Sectors under Deflation

      1. Adjustments in the Corporate Sector

      2. Movement in the Banking Sector

      3. Household Sector

   Section 3 Recent Development of Fiscal and Monetary Policies

      1. Impact of the Fiscal Structural Reform on the Macro Economy

      2. Macro Effects of the Quantitative Easing

   Section 4 Future of the Economy

      1. The Sustainability of the Increase in Exports and Its Strength

      2. Outlook for the Corporate Sector

      3. Outlook for the Household Sector

      4. Outlook for Government Spending

      5. Outlook for General Prices/Asset Prices

Chapter 2 The Tax System Reform for Vitalizing the Economy

   Section 1 Burden Structure of Individual Income Tax

      1. Trend of Individual Income Tax System in Major Countries

      2. Burden Structure since the 1980s

      3. The Tax Burden through the Life-cycle and by Generation

      4. Actual State of Deductions: Issues and Analysis

   Section 2 Burden of Corporate Income Tax

      1. Trend of Corporate Income Tax in Major Countries

      2. Current State of the Burden of Corporate Income Tax as Seen from Companies

      3. Current state of the Burden of Corporate Income Tax (International Comparison)

      4. Simulation of the impact of corporate income tax using an applied general-equilibrium model

Chapter 3 Issues for Vitalizing Japan' s Economy

   Section 1 Construing Concern over "Hollowing Out of Industry"

      1. Structural Changes in Trade

      2. Changes in Industrial Structure

      3. Dealing with Structural Changes in International Division of Labor

   Section 2 Current Situation of Structural Adjustment and Tasks for Economic Vitalization

      1. Improvement of Corporate Management Efficiency

      2. Improvement of Labor Allocation Efficiency

      3. Improvement of Fund Allocation Efficiency

      4. Improvement of R&D Efficiency

   Section 3 Economic Structure Outlook

      1. Outlook for New Economic System

      2. Outlook for New Economic Growth

Conclusion

Appended Notes

Long-term Economic Statistics


[Annual List]