This paper focuses on a developing country's policy strategy for balanced economic growth under financial globalization. Sudden outflows of foreign capital in the middle of 1997 occurred as foreign investors responded to macro-economic unbalance in Asian economies in the mid-1990s. Many Asian economies heated up beyond their potential growth rates during the boom of the mid-'90s, through over-investment, over-consumption or a financial bubble. Why did the financial authorities dismiss these signs of macro-unbalance? One of the causes may have been a failure to estimate potential growth ratios based on the NAIRU (Non-Accelerating Inflation Rate of Unemployment) or Phillips curve. In the early 1990s NAIRU or Phillips curve appeared to be shifting leftward in many Asian economies: unemployment across the East and Southeast Asian region decreased from over 4.5 % to around 2%, although price levels remained stable. Lower unemployment, however, does not necessarily imply a leftward shift of the NAIRU. We need to analyze movements in productivity of both labor and capital. The estimation of NAIRU using modern smoothing filters tends to fail in a developing economy, due to lack of data and rapid changes in unemployment rates. The lesson from the Asian financial crisis is that a developing country should keep its economic growth rate on a balanced, moderate uptrend. Maintaining balance in economic growth could protect a small national economy from the trauma caused by volatile foreign capital movements. The government may have to adopt various means for capital control in order to reap the benefits of increased inward investment while avoiding the risks. In order to avoid frequently recurring financial crises, a developing economy should make a development plan based on the idea of balanced economic growth. A key tool to achieving that it is through improving the estimation of NAIRU.

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The purpose of this paper is to consider the recent financial globalization and its relationship with the international monetary system. Firstly, I analyze the structure of the recent financial globalization and compare it with the classical globalization prior to 1914. In those days the pound sterling was the preeminent international currency under the gold standard system. Nowadays, the U.S. dollar is the leading currency, and it has dramatically increased its influence under the floating rate system since the 1970s. Particularly since the 1980s, the volume of international capital flows has increased sharply and the structure of the international financial market has become more complicated, as seen in the euro-market and the derivatives market. Secondly, I note that many developing countries, including emerging countries and countries in transition, adopted capital account liberalization in the 1990s, partly under the influence of IMF policy. However, the 1990s also witnessed currency crises in Europe, Mexico, East Asia, Russia, Brazil and some other emerging countries. One of the most important features of the recent globalization has been the extremely rapid expansion of international liquidity, denominated mainly in the U.S. dollar. I analyze this international liquidity problem and review the causes of and the policy responses to currency crises in the 1990s. Thirdly, I look at the role of the Japanese yen and the German mark, both of which have been used in international transactions since the mid-1980s, primarily in East Asia and Europe respectively, but without ever approaching the level of international use displayed by the dollar. Meanwhile, the launch of the euro in 1999 may have a great impact on the U.S. dollar's status in future. I examine recent trends in the international monetary system-not only currency union, but also currency board systems, basket-peg systems, fixed-rate systems and floating-rate systems and discuss various plans for reform of the international monetary system.

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The debate over the status of the middle class in the modern economy has reached boiling point these days in Japan as well as in America. This paper deals with middle-class economic wellbeing in the U.S. during the 1990s. The 1990s were marked by the progress of information technology (IT) and globalization, which led to an increase in employment of over 15 million jobs in ten years. Contrary to the superficial stereotypical arguments, IT producing industries contributed heavily to wage increases and to productivity growth. Income growth in the middle range was especially noticeable during 1995-2000. The recession of 2001, however, seemed putting the break to the equalization trend. Among the demerits of the new economy-type growth, mounting job insecurity stands out most evidently. A decrease in secure full-time jobs added to family insecurity. As a result, husbands are taking second jobs and more housewives are taking employment. Personal bankruptcy has been increasing rapidly. The 'rules' of the new economy, i.e., easy founding and restructuring of small and medium-sized enterprises-entails corresponding costs on the side of middle-class workers.

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This paper examines the public values associated with the neo-liberalism that seems to have prevailed all over the world in recent decades. This issue relates to that of why some people have tended toward neo-Nazism or nationalism in European countries, as well as becoming conservative and bellicose in the United States, after the September 11 attack. Taking average people living in the U.S. or EU countries as 'middle citizens' in the Western developed world, this paper makes the following three suggestions. First, these middle citizens dominate the contemporary world economic system. They constitute less than one-fifth of the world's population, but have enjoyed high and increasing levels of material well-being, while also increasingly wasting natural resources, disrupting the natural environment and exacerbating poverty among people in underdeveloped countries. Second, the benefits of high post-war economic growth in the developed countries have spread to working-class people, bringing them higher incomes and better welfare systems. This has eroded working-class consciousness to the point where many now view themselves as independent citizens, and not a few have become familiar with the workings of the market economy. In these developed countries it is no longer true that the workers 'have nothing to lose but their chains.' Finally, neo-liberal economic and political policies have actually won considerable support from citizens living in developed countries where there is a well-developed market economy and welfare society. Unexpected threats to individual and/or national identities, such as attacks by terrorists, may turn that posture of policy support into outright nationalism. When the living conditions of 'middle citizens' are seriously infringed and their powers challenged, their willingness to cooperate with other nations may be eroded.

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Capital accumulation takes precedence over people's living conditions in Japan. This is a matter of distribution of economic wealth, in which the company has an advantage over labor. The theme of this paper is to clarify the social system by which the distribution of economic wealth is determined in Japan. A comparative analysis of economic wealth distribution between developed countries shows that Japan is a country where the distribution has a remarkably strong bias toward capital at the expense of labor. This bias can surely be expected to intensify as a result of government 'restructuring' policies. One typical policy of this kind is the tax reform for fiscal year 2003. This tax reform is designed so that the government can raise the income tax on wages, while reducing tax on the profits of big business by providing tax breaks for investment in research and development. Distribution of economic wealth is determined through a power relation between capital and labor. That same power relation also determines government policies that impact on the distribution pattern. The point here is to explain the social system that enables big business to hold its advantage over labor in Japan. The controlling power of big business in Japan is analyzed at three levels of society in this paper: First I look at the workings of so-called Japanese management at the company level, second at the subcontracting system at the inter-firm level, and third at the 'iron triangle' coalition that links big business to bureaucrats and politicians at the government level.

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The Netherlands had a miraculous recovery from a severe unemployment crisis in the early 1980s. Before then, the 'Dutch disease' had been a term used by economists as a synonym for poor economic policy; but as the Netherlands moved to record job growth in the 1990s that term was replaced by an altogether more positive one: the 'Dutch miracle.' Dutch policies for employment growth, welfare reform and corporatism were nicknamed the 'Polder Model.' The model consisted of a total package of policies, including wage restraints and austerity budgets from the early 1980s and the reform of the social security system and employment policy in the 1990s. This article discusses the Dutch model of work-sharing, which was introduced in 1993 through a tripartite consensus of government, trades unions and employers' organizations. Earlier work-sharing policies had featured reduction of working hours (from 40 to 38 hours per week in 1982 and then from 38 to 36 hours in 1993), or early retirement (1982), but this paper focuses specifically on the 'equal-treatment of working hours' policy introduced in 1993. I explore Dutch-style work-sharing as a new type of working/employment system for the 21st century that has great potential-to meet the demands of the women's liberation movement for women to be given the chance for self-realization and achievement, while also rehabilitating the family from the damage inflicted on that institution in the 20th century. At the same time the Dutch system is especially applicable to a society with an aging population and a low birth-rate. Accordingly I also discuss the possibility of its introduction in Japan.

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This paper aims to clarify the role of community work in England from the viewpoint of the social economy, focusing on local currencies, which have been developed all over the world since the 1990s. In this paper 'local currency' is defined as any system of informal community exchange based on general mutual relationships. Local currencies in England started with local exchange and trading system (LETS) in the early 1990s and have been recently developed to Time Bank. This paper clarifies the role of community work in comparison with both types, based on the idea of the full-engagement society proposed by Colin C. Williams. The social economy embraces a broad range of activities with the potential to provide opportunities for local people and communities to engage in all stages of the process of local economic regeneration and job creation. However, research on the social economy has so far focused on the formal economy expressed in official statistics. The informal economy has been neglected as a result. By looking at the theme of local currencies, I hope to evaluate the under-researched role of the informal economy in the community. According to Williams' investigations, it is difficult for low-income households to engage in self-help community activities. They are faced with many barriers, such as lack of financial expertise, confidence, physical ability, equipment and social networks. If these barriers to participate in self-help activities could be addressed, there would be possibilities for growth of such activities. Local currencies are a source of such possibilities.

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