'Adam Posen on Japan’s Recovery: Going Right, Just Not Going Well'

How are things going in Japan?:

Adam Posen on Japan’s Recovery: Going Right, Just Not Going Well, by Jacob M. Schlesinger, WSJ: A year and a half after Prime Minister Shinzo Abe launched his program to end Japan’s long slump, a number of economists are turning skeptical about prospects for success. One remaining optimist — albeit with some caveats — is Adam Posen...

The gist of Mr. Posen’s argument is that despite some short-term setbacks, there are plenty of positive signs Japan is on track to return to steady growth and end deflation. But progress will be slow and unsteady, in part because he believes Japan must balance its growth strategy with a plan to curb its debt.

Current disappointment is partly the fault of the “spin” that higher prices would lead to a self-reinforcing cycle of higher wages, spending, and investment, he said. “It would be nice to have. But it wasn’t virtuous cycle or death spiral. We’re out of the death spiral. That’s good.”

Here are edited excerpts from the interview...