The public debt ratio will rise considerably in the United States and the euro zone: Can lessons be learned from the situation in Japan?

The COVID crisis will lead to a very significant rise in the public debt ratio in the United States and the euro zone. In Japan, this ratio has been at a very high level for a very long time. What are the observed effects of Japan's very high public debt? On inflation: no rise can be seen linked to public debt, given the increased labour market flexibility; On monetary policy: it is doomed to monetise the public debt and to keep interest rates at zero; On private sector debt: there has been no very significant increase in private sector debt despite the very low interest rates; On asset prices: for a long time, there was no significant rise in asset prices comparable to that seen in other OECD countries, but real estate prices eventually began to rise. The massive additional money supply seems to have been largely absorbed by an increase in the demand for money and by the rise in bond prices, but not to a large extent by a rise in risky asset prices; On the use of household savings: it finances the government, and not the companies that also finance the government, hence the unproductive use of savings .