Revelation that expects COVID-19 to break bubbles

If there is such a thing as the “Revelation of COVID-19,” I would like to recommend this book written by an incumbent economics professor. Surprisingly, the author employees a highly conclusive and provocative note for a scholar. The further I advance on the book, the more drawn I am to his reasoning.

Having served as an official at the Japanese Treasury Ministry, the author currently teaches students in Keio Business School. He has ample experiences with the real economy and economic theories. As the title of the book implies, he proposes the idea of “bubble after bubble,” sharing his view of the global economy that a bubble is blown up larger to burst and another follows as a solution to the earlier one.

What captures attention in his theory is his confirmation that the bubbles of the real economy will meet their doomsday because governments are using up all available financial and fiscal policies to get out of the pandemic. In a nutshell, they are running out of ammo that will shoot up the economy. Thus, the world will see the last day of more than three decades’ bubble expansion since the end of the Cold War. The author expects that an economic recession following the pandemic is a plateau of bubbles that will possibly last several decades.

Added to this, one of the author’s biggest concerns is an economic shutdown following social distancing and a fiscal bankruptcy arising out of massive cash aid. He predicts with full certainty that the Japanese government will be driven into a fiscal meltdown, advising it to come up with a detailed action plan on whether to increase taxes or reduce government spending after fiscal catastrophe. This lesson may also hold true for South Korea as it has put in place similar quarantine and economic policies including disaster relief funds to Japan’s actions.

The book criticizes that the Japanese government has been consistent in deploying excessive quarantine measures blinded by the value of life, implying that it refuses any discussion on efficacy vs. cost and focuses too much on social distancing rules. As the author puts it, Japan as a whole is suffering an abnormal brainstorm. His advice may prove valid to all other nations which should find the greatest common denominator between two conflicting goals – quarantine and the economy.


Sang-Un Kim sukim@donga.com