Stimulating Asia the right way

GLOBAL CRISIS: "Prying Open Asian Wallets: With exports plunging, governments are prodding consumers to save less and spend more," by Frederik Balfour, BusinessWeek, 23 & 30 March 2009.

Some send cash (Thailand and Japan), while others focus on vouchers (Taiwan) and coupons (China).

Experts say the Taiwanese approach makes the most sense: you want spending, not mattress stuffing.

Comments

[James]

What experts? How about a citation? Because the latest data coming out in Taiwan shows that vouchers simply displaced cash spending (i.e. didn't work). The cash was then saved. Japan had tried the voucher thing awhile back; that begs the question why did they pass out cash this time if vouchers are the way to go?

If you want people to spend the extra money they're getting, you're going to have to give it to poor people, who don't have the capability of saving much. If you give it to the whole population, people that can save are simply going to save extra cash in place of the vouchers.