President Ma Ying-jeou met with Dr. Richard C. Koo, Chief Economist at Nomura Research Institute, on the morning of June 23 at the Presidential Office and extended a warm welcome to him on his return to Taiwan to deliver a speech.
President Ma remarked that Dr. Koo is a highly distinguished economist in Japan and the United States, and he was previously ranked first among economists covering Japan in the Nikkei Financial Ranking for several years. In addition, the Institutional Investor magazine from the United States previously voted him the top economist as well.
The president also lauded Dr. Koo for his unique perspectives on the Japanese and global economies. He noted that Dr. Koo has agreed to speak at the Third Wednesday Club, and his address will introduce the nature of a "balance sheet recession" and measures to address it.
President Ma said that last year's financial tsunami triggered a global economic recession that has deeply affected Taiwan, especially as it is an export-oriented economy, adding that even now the situation has yet to return to normal. The president said that this is a perfect chance for Dr. Koo to offer his expertise and suggestions to us, and as such he would like to express a welcome to Dr. Koo on behalf of the government.
Dr. Koo expressed his appreciation to President Ma for taking time out of his busy schedule to meet with him. He also exchanged opinions with President Ma on a "balance sheet recession." Dr. Koo commented that the global recession brought on by the financial tsunami is quite a rare event. This time, the credit crisis generated problems in the banking sector, causing everyone to rush to reduce their debts and raise their savings and reduce borrowings. However, what resulted was that the increased deposits have been unable to return to the market, severely impacting market liquidity. This has taken a toll on economic growth and triggered a recession. He said that this economic pullback is quite different from the type of recession that is mentioned in economics textbooks, but that it is extremely similar to the economic weakness faced in Japan for over a decade. Dr. Koo said he feels nations should carefully examine Japan's experience. Therefore, he said he has recently been traveling throughout the world and delivering lectures on the topic, hoping that the results of his research into Japan's economy can help enlighten governments of other nations. Dr. Koo said he believes that the way to address this type of "balance sheet recession" is through long-term government investment, thus increasing liquidity in the market and maintaining GDP levels. However, this process is an extremely long one and governments must be patient, he said.