Since My Degree Is In Economics

The Economist argues that the Bank of Japan should raise interest rates to even out some of the economic distortions currently weighing down the Japanese economy.  And I agree with them.  As the article says, it defies nearly every basic macroeconomic theory that raising interest rates could possibly boost consumer spending, but in this case it may actually work.  Based on an extremely cursory (and not very technical) survey of Japanese households, most seem perfectly willing to spend if only they could maintain their rate of saving and bring in slightly more income; raising interest rates accomplishes the second without hampering the first.  Furthermore, it is doubtful that higher interest rates would actually induce Japanese consumers to save a higher percentage of their income.  People save largely for retirement or rainy days, and you could argue that higher interest rates would induce them to save more for either of these changes in circumstance, but with an extremely generous social safety net, Japanese consumers don't really need to put away more than they already do for either one.  So it is entirely likely that the income effect would win out with higher interest rates and that Japanese consumers would, in fact, spend more.  And higher rates would certainly make the yen stronger, which I unequivocally support since I will start sending money back home next week and need each yen to go as far as it possibly can.