Empirical Analysis on the Relevance of the Resilience of National Economies and Industry, Fiscal, and Monetary Policies

Currently, the world faces a vast number of risks such as cyber attacks, energy crises, food crises, pandemics, terror, and war. According to a report issued by the World Economic Forum, "systemic financial crisis" was pointed out as the greatest risk to impact the world and the probability of such occurrence also tends to increase. In order to find a way to build a resilient economy for Japan and an early recovery from external shocks, this paper analyzes the characteristics of the nations which recovered earlier from the collapse of Lehman Brothers, and shows what national economy types are stronger and resilient. As a result, expansion of public works investment significantly affects the earlier recovery of the gross domestic product (GDP), and development of the manufacturing industry and expansion of public works investment significantly affect the earlier recovery of the unemployment rate. This paper concludes that increasing public spending such as on public works investment is a rather effective macroeconomic policy for the resilient recovery of the GDP and unemployment rate from global risks.