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For over two decades Japan has tried pretty much every policy option available to kick-start its economy. As the years have passed the measures have become more bold, even extreme, as policymakers have battled to boost growth and raise inflation to a targeted 2 per cent. 

Success has been limited. As Martin Wolf writes in his weekly column, while unemployment is low and growth is rising, inflation is proving stubbornly resistant to all attempts at stimulation. This matters, Martin says, as near-zero inflation limits the effectiveness of monetary policy in a downturn. 

Added to this, there are two further important challenges facing Japanese policymakers: productivity; and deficits and debts. Here the country is being misled by conventional wisdom. On productivity, an orthodox response — boosting participation in the labour market and so on — is the correct one. But when it comes to public sector deficits and debts the orthodoxy is less useful. The real issue is that Japan’s deficits are the mirror image of huge private sector surpluses. To tackle this, writes Martin, “Uninvested and undistributed profits need to be turned into consumption.”

Puzzling productivity: Faced with the latest batch of poor productivity numbers, a traditional response of British policymakers has been to say that while others may be more productive we at least have the jobs. This comfort blanket is starting to look very threadbare, writes Sarah O’Connor. In her latest column she writes how it can be possible to deliver both — if you make the right policy choices. 

Silence please: A familiar feature of the European project is the grand rhetoric that accompanies it — from ambitious visions of reforms to calls for action. Too often the result, writes Timothy Garton Ash, is disappointments as goals are inevitably missed. The answer, he says, is less talk and more quiet action. 

Growth spurt: As the US Congress works on finalising President Donald Trump’s tax plan, debate is raging over just what benefits it will deliver to the economy. In his daily Free Lunch blog Martin Sandbu says that while the plan is undoubtedly ugly it will also bring a fiscal stimulus whose consequences may not be as bad as many critics claim. 

Time to Bregret? As the details of the Brexit divorce proceedings start to emerge analysts wonder whether some of those who voted Leave may be prompted to change their mind. In a Notebook column Sebastian Payne looks at Leavers now having second thoughts but finds little evidence for a broader popular swing against Brexit. 

Best of the Rest

In defence of Corbyn from the Guardian by Maya Goodfellow: Labour isn’t flip — flopping on Brexit — this is practical politics 

Dylan Farrow asks in the LA Times: Why has the #MeToo revolution spared Woody Allen?

David Leonhardt of the New York Times as Susan Collins as a cautionary tale Susan Collins and the Duping of Centrists. 

What you’ve been saying

Once you get indoors, hide your remote car key fob in a ‘Faraday cage’ — from Mike Mason, Naphill, Bucks, UK

“Sir, Izabella Kaminska, in “An analogue solution to digital car crime” (December 6), describes how modern car thieves can capture signals from remote key fobs often kept near owners’ front doors, then clone them to gain full control of the vehicles. But there is no need, in order to protect your car from such theft, for digital tracking devices, CCTV or steering wheel locks. Put the keys in a metal box such as a tea caddie and put the lid on. The box will then be a “Faraday cage” and electronic signals will not be able to enter or leave the box.”

Top comment from Iron Knee on Janan Ganesh’s column, Why a long Brexit transition is in everyone’s interest

“I’m just confused why we can get a Canada — plus — plus — plus but Canada couldn’t.”

Now cold reality stares Britain in the face — from Prof Ian Wray, University of Liverpool, UK

“Sir, I agree with David Colvin (Letters, December 7). Britain went into Europe partly as substitute for its imperial role. In many respects it was a good deal. But not for everyone. As things turned out, the new European role created wonderful opportunities for London and the south, the well educated and the mobile. It did little for the old industrial communities, which saw their employment and wages dwindle, while post — 2010 spending cuts (especially in local government) were relentless . . . Now cold reality stares Britain in the face. Unable to afford our post — imperial world role, derailed by America’s volatile president, and shut out of European decisions (and, if things go really badly, their markets), we must reinvent our economic base and rebuild our infrastructure.”

Today’s opinion

FT View: Britain confronts limits of its military power The UK’s capabilities in defence do not match its global ambitions

Conventional wisdom on Japan is wrong Solving its economic problems means doing something about private sector surpluses

Larry Summers’ blog: Tax — cut legislation will be bad for public health

FT View: US corporation tax plans raise European hackles Congress and the White House must not use levies to promote exports

Business School Insider: MBAs can front a revolution in collaborative leadership To step up, and then step aside, is what today’s innovative companies require

David Allen Green’s blog: The UK’s misconceived Brexit policy is not binding

Bregrets? Why Britain has had few over Europe Remainers and Leavers are entrenched in their views about leaving the EU

Free Lunch: Can the US economy take Trump’s tax cut? It’s an ugly plan but it could add to growth in the short run

The case for European conservatism above grand designs We should work at preserving what we have, rather than dreaming up new projects

You tell us: who is your Person of the Year for 2017?

Opinion today: An amicable Brexit divorce The preliminary UK — EU deal is a sign that significant adjustments in expectations have occurred on both sides

Strange and unhelpful ways that Britain thinks about productivity The UK needs to invest more in workplace training, technology and infrastructure

FT Person of the Year 2017 Former Uber employee Susan Fowler spurred a wave of allegations that could change the way the women are treated at work

A letter from the editor How the FT chose its Person of the Year for 2017

The Big Read: FT Person of the Year: Susan Fowler The software engineer who lifted the lid on sexual harassment at Uber and inspired women to speak out

Who are the men accused of sexual harassment? Dozens of powerful figures faced misconduct claims as a culture of silence crumbled

FT View

FT View: Britain confronts limits of its military power The UK’s capabilities in defence do not match its global ambitions

FT View: US corporation tax plans raise European hackles Congress and the White House must not use levies to promote exports

The Big Read

The Big Read: FT Person of the Year: Susan Fowler The software engineer who lifted the lid on sexual harassment at Uber and inspired women to speak out

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