"Tokyo-Cambridge Gazette: Politico-Economic Commentaries" No.6 (September 14, 2011)

　Amidst a turbulent global politico-economic situation, Japan and the United States are experiencing similar challenges regarding sovereign bonds and foreign exchange rates, albeit their different levels of economic severity. A declining dollar has decreased the real income of Americans and spread a lingering fear of inflationary pressures, while a higher yen has begun forcing Japan's export-oriented companies to dislocate their production facilities, bringing about growing anxieties over a protracted revitalization of the Japanese economy from the disasters caused by the 3/11 Great East Japan Earthquake. In other words, the two countries are in the same boat amidst a global politico-economic tempest. Under these circumstances, this short essay suggests a novel and collaborative strategy to reduce the risks of sovereign debt crises and foreign exchange market volatility by formulating a conceptual framework based on the "Fiscal Theory of the Price Level (FTPL)." This Japan-U.S. collaborative strategy, the authors hope, would make a contribution to strengthening of the Japan-U.S. alliance with which the world economy will restore its stability...........