Japan experienced a near zero,even negative,economic growth for most of the 1990s.One of the solutions suggested by the Keynesian economists to the deep Japanese recession was to use an expansionary monetary policy.Japanese government followed this advice by announcing increasing money supply and lowering the interest rates to a near zero.Unfortunately,the economy did not recover.Using the IS-LM model,explain why the expansionary monetary policy did not work in Japan? What are the alternative Keynesian solutions to the Japanese recession?

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The Answer of Japan experienced a near zero,even negative,economic growth for most of the 1990s.One of the solutions suggested by the Keynesian economists to the deep Japanese recession was to use an expansionary monetary policy.Japanese government followed this advice by announcing increasing money supply and lowering the interest rates to a near zero.Unfortunately,the economy did not recover.Using the IS-LM model,explain why the expansionary monetary policy did not work in Japan? What are the alternative Keynesian solutions to the Japanese recession?

Japan Experienced a near Zero,even Negative,economic Growth for Most of the 1990s.One