Macquarie’s Jerram to Become Company’s Chief Asia Economist
Richard Jerram of Macquarie Group Ltd. will become the company’s head of Asian economics and leave his position as top Japan analyst, a move that reflects China’s rise and a shift toward regional rather than country- based coverage.
The Tokyo-based economist will start publishing reports on the region on Feb. 8, Jerram said by phone today. The company hasn’t named anyone to replace him as Japan economist, he said.
“We’re not differentiating between Japan and the rest of the region,” said the 46-year-old Englishman. “The ties at the company level, the sector level and the economic level are increasingly making these distinctions artificial.”
Jerram, known for criticizing the Bank of Japan’s deflation-fighting credentials, came to the country in 1987 during the economic bubble that saw the Nikkei 225 Stock Average peak at almost four time’s today’s level. In the two decades that followed the 1990 crash, the economy fell into four recessions and grew at an average pace of 1.5 percent.
“The thing which becomes tiresome after a while is the reluctance to address problems that have fairly orthodox solutions,” the economist said. “Why would you have a policy framework that pretty much guarantees the occurrence of deflation?”
Price Declines
Even as the economy struggled to escape a cycle of declining prices that drove wages down more than 10 percent in the past decade, the Bank of Japan said price stability was anything between “about between zero and 2 percent.” That language invited the perception the bank tolerated zero growth in prices, Jerram has said.
The central bank in December revised its “understanding of stable prices,” saying stability was anything “in the positive range at or below 2 percent.” The shift came after Deputy Prime Minister Naoto Kan voiced concern the recovery was under threat from deflation.
Kan has continued his pleas for the Bank of Japan to fight price declines since he added the finance portfolio to his responsibilities in January. Bank of Japan Governor Masaaki Shirakawa this week responded by saying there’s no “magic” solution for defeating deflation.
“The government’s given them a bit of a push, but not getting much back,” Jerram said of the bank’s move. “They’re still saying a lot of stuff in terms of ‘there’s nothing more we can do.’”
London School of Economics
After a stint in England, where he got a doctorate from the London School of Economics, Jerram returned to Japan, where he worked for eight years as chief economist at ING Securities before the business was bought in 2004 by Macquarie, Australia’s biggest investment bank.
Macquarie agreed yesterday to buy the equity trading and research operations of Sal. Oppenheim Jr. & Cie. KGaA to expand its business in Europe. The Sydney-based bank is also adding to its Asia research staff, particularly in China and India, Jerram said.
“Asia has been far ahead on the global recovery cycle and its going to face some interesting challenges,” Jerram said. “Quite a lot of these countries, in contrast to previous times when they lagged behind the policy cycle in the U.S., are going to have to lead this time.”