Critical Comparison of Japanese and American Fiscal Policies with Respect to Institutional Differences, 1990-2020

This thesis analyzed fiscal and monetary policy of the United States and Japan between 1990 and 2020 through decomposition of macroeconomic aggregates and put them in perspective with institutional specificalities to evaluate, whether institutions matter for policymaking today. It argues that though there are visible influences of institutions on economic development, they are difficult to control through policy measures. It is good to know of their existence, however, to better estimate future policy impacts. For policymakers, it is best to lift formal regulations around institutions and let them change by themselves. Moreover, this thesis recommends to focus on sustainable fiscal and monetary policy, which has not been achieved in Japan but more so in the United States. The yet barely visible perils of unsustainable policy deserve special attention as the analysis revealed.