Update: Mr. Singh posts the third and, as far as I know, last installment in the series on Asia's outlook written on the basis of the Regional Economic Outlook for the Asian and Pacific Region. The topic is perhaps the most interesting of all aspects of Asia's aggregate economy, the high prevalence of savings and its excess over investment which produces a corresponding external surplus which, I'd might add, is structural at this point. See below for more comments.

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In case you had not noticed, the IMF is blogging and it is not "merely" the garden variety IMF staffers they are rolling out to fill the pages; nope here we are treated to the likes of Blanchard, Atkinson, Lipsky, Cottarelli and a host of other of the Fund's A-listers. Consequently, it would seem that in an already (over)crowded world of econblogging, the IMFdirect blog merits more than a little bit attention.

In the past week, the dual post coverage by Mr. Anoop Singh of the recent Regional Economic Outlook for the Asian and Pacific Region caught my attention in particular. In the first, Mr. Singh invokes among other things the puzzle of Asia's relatively sharp recovery given the notion that the region is largely dependent on exports to grow. Two reasons especially are important here. One is the simple fact that as these economies moved into the crisis with bulging coffers (especially on the reserves vis-a-vis the rest of the world), the room for fiscal manoeuvre was greater and it was used decisively. According to calculations by the IMF, the collective stimulus programs in the Asia-Pacific region added 1.75% to GDP growth in the first half of 2009 and it makes the programs even more generous than those observed in the OECD and other emerging markets. Secondly, Asian economies has benefited from the, so far, V-shaped comeback by part of the global economy and key regions who are likely to grow smartly in h02-2009.

In general, Mr. Singh's analysis appears cautiously tied to the great unknown of 2010 where it appears that we will see whether all those battered economies of the world will be able to hold their own in a world where quantitative easing from central banks and lax fiscal policies are withdrawn rather than enacted. Here, Singh's remarks echo the general discourse where the the underlying tone is one of skepticism. A long period of risky asset buoyancy coupled with upbeat economic data releases have proved before to be crying wolf of an impending recovery and policy makers are advised to take this into account.

It is hard for me to disagree with Mr. Singh that the green shoots observed in the Spring of 2009 seem way too shaky a foundation on which to build a narrative of recovery. Yet, this is exactly what has happened and the famous inflection point will be reached when we discover that the recovery observed thus has been because of and not despite monetary and fiscal stimulus which makes the enforcement of exit strategies going into 2010 a very interesting experiment in the making. Some will make it, some won't and some will inevitably fall back into recession (not just in Asia).

However, the most important part of Singh's argument and indeed the most important part of IMF's analysis in general is the question of whether Asia's economic trajectory, in a post stimulus/recovery context, will be driven by domestic demand or not? To put it in the most reductionist form. Will Asia be a provider of net capacity to the global or economy or not? If yes, it would mean that a post crisis Asia had truly emerged as something new in the form of a force of a real addition to total demand. If not, it would mean that Asia would revert to old tricks and habits of relying on exports and foreign asset income to propel growth in national income.

Now, leaving the question of the number of export dependent economies the world economy can muster neatly to the side, I am not so optimistic here on Asia's contribution to the rebalancing of global imbalances through a net expansion of domestic demand. Yet, let me also immediately qualify here that I am not very comfortable with talking about Asia/Pacific in one both because of the obvious heterogeneity amongst the economies, but more importantly; also because I am not really an expert here. I have done the analysis on Japan though and on this I can say with unequivocal certainty that we won't we seeing any provision of excess domestic demand from this side.

Ultimately of course, Japan is of little real importance here and so is the rest of Asia really. What really matters on this topic is China and all the hopes currently pinned on her shoulders in the form of the ability of the economy to pull the global economy out of the mire. Traditionally, this has boiled down to a rather technical discussion about the RMB and an almost perennial Becketian wait for the shackles to break and an appreciating RMB to solve all problems. While I concede that the RMB should rise, it won't solve any of the underlying problems inherent in China's investment driven economy. Basically, chalk it down to culture and institutional specificity in the origin, but the simple fact remains I believe that just as China may evolve to become the economy we all hope and believe her to become (say in a 2020 context) the one child policy will have done its work so to speak and China will be sporting an OECD like age structure and is likely to even surpass many of OECD's economies.

This is no recipe for an axis of rebalancing and although China will be the main story to follow for the immediate future I think we should look elsewhere to find the potential rebalancing candidates. This may indeed involve other parts of Asia (India for instance and Indonesia), but in the current discourse the likes of China, Japan (and Korea) hold little promise in terms of providing a decisive engine for rebalancing through sustainable growth in domestic demand which exceed the investment rate.

In this sense I remain cautious on the overall sustainability of the recovery in Asia mainly because of my skepticism towards the sustainability of overall global momentum where I acknowledge that I may be very wrong. Watch out for 2010 and all those exit strategies is what I say and particularly for the "post fiscal stimulus" world. This also means that I am more than a little bit skeptical on the prospects of a sustained recovery across Asia driven by domestic demand, especially in relation to Japan and China.

At least, this would be my humble argument here a murky Monday morning in Copenhagen. In any case, you might want to punch the IMFdirect blog into your RSS reader, just to make sure that you know what the IMF is up on a daily "research" basis.

In a bubble, Day and Night

Is it Bust or is it Boom

That frames thy fearful asymmetry?*

 (click on pictures to enlarge)

Can you feel it? That calm and soothing feeling of low volatility and heaven bound risky assets driven by green shoots and second derivatives. Well, if you can't you are excused since neither can yours truly, or more precisely; he has a distinctly difficult time seeing from where people get the idea that we are headed for a broad based global recovery. However, beauty as always lies in the eye of the beholder and whichever way you look at it would be difficult to completely deny that the three key ingredients for a global recovery (and a resurgence of carry trade) in the form of low volatility, steadily climbing risky assets, and benign credit wholesale market credit conditions certainly seem to be present in ample quantities.

Now, while it is true that the level of volatility is still higher now than it was pre Q4-2008 and indeed pre August 2007 the trend so far this year has been inexorably down which reflects the perception that the worst may be over as well as the discourse of second derivatives and green shoots which has been with us throughout Q2 2009. With respect to equities they have equally begun to nudge up and are up some 5-10% from the beginning of the year in relation to Europe and the US. If you count from the trough reach some time during the first quarter this year, the increase would of course be bigger. The strength of the recovery discourse has taken many by surprise or perhaps more precisely, it has frustrated many. For example, I take note of the fact that two of the most astute macro traders (at least in my book) are feeling decidedly puzzled by the way the market is behaving at the moment. I cannot say that I blame them. For someone who take pride in being up to date in terms of macroeconomic data and analysis one would find it difficult to track the amount of bullishness which currently appear to have taken hold.

Now, I should immediately point out that I am not blind to the existence of the second derivative. I mean, I took calculus and I can also eyeball a graph in changes when I see one. My only gripe is that it only takes the faintest of scratch in the surface of the second derivative/green shoot glamour image to see that the fundamentals have not changed and moreover that the crisis has now moved its locus away from the US and right smack into the mainland of Europe in the form of significant downside risks in relation to Southern Europe and the ongoing mess in the CEE.

Yet, who is listening to a Danish student of economics anyway?

Consider consequently that the past couple of weeks brought us Bernanke's "exit talk" testimony to congress, news that a certain Mervyn residing at Threadneedle street would beat Bernanke to the exit, news that Russia is actually seriously considering issuing (and expecting foreign investors to bite) debt to cover its 2010 deficit, news that Hungary actually lowered interest rates despite, one could easily infer, an abyss of downside in the form of a plunging forint and a liability side denominated in Swiss francs, and finally Timmy's trip to China where it seems that the main message carried was one of reassurance that the US most certainly intend to vigilant towards the rising deficit.

We could add the Q2 GDP print in the US (preliminary) put up a much better figure, - 1% annualised, than expected which has so far been interpreted as a sign of recover although yet again I think that narrating this as a sign of an impending recovery is somewhat of a stretch. Meanwhile, Europe is heading straight for deflation and although I know that some economists, especially those of the old academic guard, consistently have been pointing to the benign effects of rigidness on the downside it is very important to remember that those same prices will need to adjust in key Eurozone countries absent a currency to bear some of the burden and thus price/wage rigidity may turn out to be a curse rather than a blessing.

Where is the Recovery?

The easiest way to approach this question is perhaps to point out where the recovery isn't and here I am talking about the OECD in general. Surely, we may succeed to avoid future cataclysmic events but the something has changed and new fundamentals are taking over. For example, I seriously doubt that many people have considered what it means for the global economy that the US economy will need to run an external surplus and I also think that most people have not yet realized the consequences of the unfolding mess in Europe and the Eurozone. On the other hand I have also stressed before how I am not, after all, a permabear in the sense that I do indeed see positive signs in emerging economies such as for example Brazil, India, Chile, Turkey, and China (although the latter is different for a number of reasons). I won't call this decoupling because evidently it isn't. To stay in the jargon I would rather call it re-coupling since this is essentially what it is and one key issue is the extent to which the new global economic system will help to even out the present imbalances and what consequences this, in some sense, inevitable rebalancing will have on surplus and deficit economies respectively. In this context and although one should always be careful in quoting onself, the following from an entry back in May still sums up quite well how I see the world at the moment;

We are very much still stuck in the mire and especially so in the context of the so-called developed OECD economies where it is difficult to see where any speedy recovery is going to come from. On the other hand the world is not made up entirely by the OECD edifice and it is exactly the potential for an asymmetric "recovery" and how global monetary policy might serve to transmit such a recovery which is the topic of this entry.

For the specifics of how I see the role of global monetary policy and global liquidity I recommend you to visit the actual post. However, it is worth noting that in a world where major global central banks are destined to keep rates low for an extended period it does not take much creativity to imagine the dynamics by which the global economy may potentially move forward driven by carry trade flows financed in the developed world seeking yield in whatever economies that might be able (and willing) to absorb the tide which is coming.

As I have stressed on several occasions it is exactly this reshuffling of the global economy on the back of the financial crisis which is at the heart of the matter. One obvious consequence is thus that the global economy, at one and the same time, increasingly will be populated by an increasing amount of economies with the need (and desire) to deleverage as well as an increasing amount of economies dependent on exports to achieve economic growth. In wonkish terms, global economies will tend to move towards the same intertemporal preference for consumption and saving and since global intertemporal smoothing, by definition, occurs through current account imbalances it is not difficult to see how there is a constraint on many economies’ ability to smooth their consumption and saving decisions optimally in the case of a process of crowding in one end of the spectrum.

An obvious question here becomes; who, if any, will be the economies tilting the scale in the other direction through their ability to provide capacity (return) for other nations' desire to save more?

How are things in Emerming Market Land then?

Personally, I have tended to put my focus elsewhere than China most prominently because I think that the old narrative of the BRIC economies taking over the helm is not an adequate way to look at it. Essentially, I would put Brazil and India one one side and Russia and China on the other side since in the case of the latter they are about to grow old much before they become the economies so many people expect to become. Apart from Brazil and India I also see a fairly wide batch of emerging economies with the potential to do the heavy lifting as we move forward and I would include here economies such as Chile, Indonesia, Turkey, Morroco and a number of others. Much more than quibbling about the actual candidates here I want to emphasise the importance in realizing how this global realignment won't take place with the emergence of one single economy taking over from the US, but rather with a "basket" of economies/currencies driving the realignment.

Having said all this, it is pretty difficult to get around the fact that everything seems to be revolving around China at the moment. More specifically fears are growing that in an effort the counter the global recession and in a world where 6-8% growth rates are, in general, difficult to come by Chinese authorities as well as foreign investors are fuelling a bubble in China which may look like the one currently unravelling in e.g. the Baltics look minuscule [quote from Bloomberg and the FT]. Thus and even though I would argue that the analysis should have a different fundamental focus it is still cast in the perspective of, first China and then the BRICs in general.

The BRIC nations, which also include India and Russia, have the four best performing stock markets in dollar terms this year among the world’s 20 biggest, according to data compiled by Bloomberg. China’s Shanghai Composite Index has soared 85 percent in dollars while Brazil’s Bovespa Index rose 77 percent. India’s Sensitive Index, or Sensex, climbed 61 percent and Russia’s RTS Index gained 60 percent. The Standard & Poor’s 500 Index in the U.S., by comparison, is up 8.4 percent while Japan’s Nikkei 225 Stock Average rose 7.5 percent.

Investor appetite for emerging-market assets is building on speculation that countries such as China and Brazil will be among the first to recover from the worst global recession since World War II, said Vinicius Silva, New York-based emerging markets strategist for Morgan Stanley. “It highlights the fact that demand for emerging-market assets remain strong and that companies, particularly in the BRIC markets, are using the improvements in capital markets to raise capital,” Silva said.

(FT)

Shares in Shanghai and Hong Kong tumbled on Wednesday as investors snapped up two newly listed mainland construction groups while selling down the rest of the market after reports that China’s central bank might rein in bank lending. Shares in China State Construction Engineering rose by as much as 90 per cent on their debut before closing 56 per cent stronger in Shanghai. China’s largest house-builder had last week raised Rmb50.2bn ($7.34bn) in the world’s biggest initial public offering since Visa raised $19bn in March 2008.

It is way beyond the scope of this post to open the box on what is really going on China. In terms of that topic I reserve the right to deal with it later and refer, thus far, to my styling on Blake above. However, I did like the recent analysis by Morgan Stanley's Qing Wang in which he talks about whether China is over-investing or over saving as well as the very relevant question of where the money would be spent were it not being used to finance the massive infrastructure investment program. Or, what is the opportunity cost of China's fixed asset investment program?

Given China's high national savings rate, from the perspective of the economy as a whole, there are only three forms in which China can deploy its savings: 1) onshore physical assets; 2) offshore physical assets; and 3) offshore financial assets. Since China maintains tight controls over outbound capital flows, about 70% of China's total offshore assets are in the form of official FX reserve assets as a result of investment made by a single-largest investor - the central bank. Moreover, we estimate that about 65-70% of China's official FX reserves are invested in US dollar assets, the bulk of which are US government bonds.

In response to this I ask the simple question. What is actually the capacity in China to create return on current and future investment of the magnitudes we are talking about both in the context of money supplied by domestic stimulus packages as well as foreign money thirsty for yield? Wang touches exactly upon this question as he questions just how much China can suck up. I would put it much more bluntly. China's capacity is declining and will continue to do so as we move forward as a result of the ageing which the one child policy is set to produce. This is really the missing story on China at the moment I feel and one story which could go a long way to differentiate the story. In this respect I do agree wholeheartedly with Michael Pettis when he says;

I have warned for a long time that it would be very difficult for China to make the necessary transition to a consumption-led economy quickly enough to accommodate the global adjustment taking place. Unless it is willing to see its economy collapse, there is simply no way China can reduce its negative net demand quickly enough to match the contraction in US demand and so avoid squeezing the hell out of the global tradable goods sectors. That is why policy coordination is so important, especially between China and the USD, and of course that is why I continue to be a pessimist. I do not think this policy coordination is taking place. I will write about this more later this week.

The only thing I would add is that this is not simply a question of correcting US-China imbalances, but a more more deep rooted issue in terms of fundamental drivers of international capital flows and the future supply of net capacity.

Moving on to safer ground I recently did a lengthy analysis on Chile in which I concluded that the economy was one of to watch for relative good news in relation to the financial crisis. Recently, we learned how Chilean banks booked a healthy US 959 million profit in the first half of 2009 and although this number is useless in itself I think that it is pretty obvious from digging into the specifics (see article) that although Chile financial sector has seen its share of losses, the picture is a lot less dire than elsewhere. In fact, if we look at one of graphs that I showed in my analysis of Chile, we see that financial services have held up remarkably well during the financial crisis (see also here), no doubt due to strong underlying fundamentals as well as a very aggressive policy reaction from the central bank. 

Generally, analysts and local observers in Chile are beginning to notice green shoots with increasing regularity and unlike the ones observed in Europe or elsewhere in the OECD I am more confident that the ones in Chile are going to be long lived although 2009, in all likelihood, will be a tough year when the chapter is closed. The following quote is from Bloomberg;

Chile’s economy may be starting to recover from its slump as extra government spending spurs growth, Finance Minister Andres Velasco said today. Velasco has spent more than $4 billion this year on tax cuts and extra outlays. He will pull $8 billion from Chile’s offshore savings funds in 2009 to help pay for the stimulus as well as to plug the budget deficit caused by slowing growth and lower receipts from mining.

Chile is facing the deepest recession since 1999 after revenue from exports declined and a virus ravaged its salmon farming industry. The economy shrank faster than forecast in the first half and probably contracted in the second quarter from the first, the central bank said on July 8.

“These policies have effects, but they don’t occur overnight, they don’t happen in one month or one quarter,” Velasco said. “We have to continue working, we have to keep a cool head and at the same time be prudently optimistic.”

Now, Velasco has a distinct interest, of course, in spinning the story in a certain way but until evidence surfaces to the contrary I am willing to buy this story. More generally, the influence of China also pops up in the context of copper prices where many suggest that a large part of the recent increase in Copper prices (and indeed commodities) owes itself exactly to the stimulus money from China. As a side note on this, it seems that the link between rising Copper (and commodities in general) is being increasingly linked to a story of stockpiling in China and then of course, what will happen when China decides that it has had enough. This was a story I picked up on in my analysis of Chile (picked off from Macro Man) and it appears to be gaining traction as an actual analytical explanation.

Elsewhere in Latin America, Morgan Stanley's Latam analyst on Brazil Marcelo Carvalho simply throws in the towel, as it were, devotes an entire note to the link between Brazil and China and what this means for the economic growth of the former. As will come as no surprise Carvalho notes the strong link between Brazil's economic performance and commodity prices and since China certainly seems to be driving the latter, if not directly, then through its effect on overall global sentiment then the rampant growth in China may add positively to the outlook in Brazil.

Moving the perspective up a further notch and as a concluding remark on my, admittedly, selective tour of the emerging market edifice I will leave you with the recent general statement from Morgan Stanley's Manoj Pradhan;

The strong worldwide rally in risky assets since March reflects not just the relief that the worst is likely behind us, but also anticipation of a return to growth for most economies. Much is expected from Emerging Markets, particularly from Asia ex-Japan, which is expected to outperform the rest of the world. Markets and investors realize, however, that not all EM economies are alike, and some will show output growth that is lower than the 1.3% growth our global team expects from the G10 economies in 2010.

Thanks for nothing might be your immediate response here and although I agree that this is extremely general it does sum up the main discourse at the moment whether you agree or not.

Bottomline - What to Watch?

The answer to this question depends on your perspective of course but it seems abundantly clear that if the locus of the financial and economic crisis has moved from the US to the shores of Europe and in particular Eastern and Southern Europe, the corresponding locus of the recovery has moved to Asia (ex-Japan) and most forcefully China. I think it is important to understand how and why these two discourses may co-exist as we move forward.

I believe it is obviously clear that the global economy is not heading for a quick rebound here, but it is equally as clear that some economies will be able to post growth rates that are much above the mean of what the OECD is able to. In this way, one key theme to watch is how this difference is transmitted through to the global economy e.g. in the form of carry trade flows but also in the form of an evolving process by which some economies begin, and go through, their inevitable adjustment and rebalancing phase.

In this specific context I have to be more than a little bit skeptical about the capabilities of China. This is not out of an inherent disdain towards the country but, on the contrary, because I fear that China may ultimately succumb to all those hopes and subsequent load pinned on her shoulders. In this sense I think, although I acknowledge that I have presented no formal analysis to back it up, that the recovery is some way to really materialize and that it may just ultimately be bust and not boom that frames China's economy.

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* Apologies to William Blake; and of course to Macro Man for encroaching on his territory.

Consequently and although I am lukewarm about the idea of green shoots and second derivatives, I am more positive about the narrative presented by BlackRock Inc's Bob Doll when he points to the potential in emerging markets;

Emerging-market stocks may gain an average of 20 percent this year as they rebound faster and stronger than their peers in developed countries, said Bob Doll, vice chairman and chief investment officer for BlackRock Inc. The global economy has probably seen its worst in the past two quarters, with developing nations already starting to emerge from the recession, Doll told reporters in Singapore today.

“If in fact we have seen a bottom in markets and economies are going to recover, the emerging parts of the world will recover the most and the fastest,” Doll said. “After all, their recessions were largely unwanted inventory build-up and not the credit bust in the Western world.” The MSCI Emerging Markets Index has already gained 25 percent this year, with developing countries making up all 10 of the world’s best performers. That’s outpaced the 2.3 percent retreat in the Standard & Poor’s 500 Index.

Now, when it comes to the actual headline number presented, I would assume, for the media I won't venture an opinion. However, the general idea that emerging markets such as India, Brazil and Turkey are among those economies where growth conditions are, relatively, most favorable I am very much in agreement with. Clearly, this is not going to be one way street and as we learned from parsing the data from e.g. Mexico and Argentina it indicate how the swine flu may just have tipped over the economy in the case of the former whereas the latter also looks set to enter an actual recession. However, there are positive signs too, not least in the context of India which Edward recently put under the loop and concluded that conditions might just favor India to rise well above the rest of its peers. After looking at the data myself and from reading this, I am very much inclined to agree. So yes, I do think that emerging markets are going to fly; some of it will be based on real fundamentals and some of it will be the carry trade since in a world where some of the biggest central banks are commited to low nominal interest rates the environment for carry trades are perfect if and when volatility stays down. Just witness Deutche Bank's recommendation that investors sell Euros to buy into the Ruble and Forint (who are these people?!). Astute investors will thus always remember the story of Icarus, but the underlying current is still important here.

Apart from this I want to emphasise two points.

First I think that the points above underpin the general idea that whatever global economy which will emerge in the wake of the current crisis, it will one in which the sources of global demand, yield, and capacity will be more diverse than before. This is of course the positive spin to the fundamental question of who and where global demand will come in the future, not least to satisfy the excess savings which will emerge as more economies become dependent on exports to grow.

Secondly, I want to touch briefly on a related topic which has been dominating the debate on an on-off basis lately. Specifically, I am talking about the prospect of the Chinese Yuan as the future global reserve currency (surpassing the USD) which was given new life recently in the form of a NYT op-ed by Nouriel Roubini in which the (self)-proclaimed economic oracle predicts that we are now entering an Asian century with China as the dominating the economic power. Stefan Karlsson also moves in to steal some of Mr. Roubini's thunder dryly noting that the idea of the Yuan as global reserve currency is not new as he himself predicted it four years ago. Finally, there is Jeffrey Sachs (hat tip: Mark Thoma) who also muses on the prospect of a more diversified global monetary system with the Yuan in a dominant role. 

It is always customary to begin with the points you agree with and let me be very clear here. The days of unilaterally sponsored demand by the US and the subsequent role of the USD is over. There is just no way in which the US can rise to command the same role in the global economy as it did before the subprime crisis hailed the initial fall from grace. However, the idea that China alone will rise from the ashes of this crisis to take over from the US is a fallacy. 

In essence and all the technical issues aside of whether China will choose to issue debt denominated in RMB, whether the focus of trade credits and transactions in general will move towards a favor of RMB etc, any one candidate for reserve currency status would clearly need an open capital account and almost surely, in the present context, the stomach to run a current account deficit. So let us chew on this a bit. If China become the sole economy to "take over" from the US it would mean that China should run a rather substantial external deficit. 

Basically, there are many aspects of being a reserve currency but one surely is the ability to be a net debtor nation. It goes with the territory I would say and especially in whatever "new" global edifice we will be looking at. I think this is what Roubini is missing even if his other points of a more structural and institutional nature are true; clearly China is a force to be reckoned with, but then notice this;

China is a creditor country with large current account surpluses, a small budget deficit, much lower public debt as a share of G.D.P. than the United States, and solid growth.

You can almost smell the carry trade and yield here. There sure looks to be a healthy cake to chew on here, but the thing is that the astute commenters above are not thinking about the fact that within the next decades China will age at an unprecedented speed (perhaps even faster than Japan!). Now, I am not sure whether or not this demographics stuff has trickled down yet but in this context it is important. Clearly, there will be growth in China and she will ascend to command a larger role, but if she opens the capital account we will have the world's biggest firework and a huge version of Latvia. I am  sorry, but if you don't factor in the demographics here you are getting nowhere.

Consequently, I think that Bretton Woods III is a lame duck in so far as it is made up of one currency to take over the USD; there is just no ONE economy out able to shoulder the load. This is what has changed now, the US (or Anglo-Saxons if you will) cannot carry us anymore. Rather I imagine that it will be a basket and although China will be an important part of that basket we also need to look at India, Brazil, Turkey, Chile and a number of other economies. If the discourse solidifies towards China as the economy to single handedly pull the global economy and stage a process of rebalancing it won't be pretty once markets start to factor in the demographic fundamentals in China.

Financing healthcare in rapidly aging Japan - Naoki Ikegami

Coping With Population Ageing in China - Judith Banister

Global Population Aging and its Economic Consequences - David Bloom

Rapid Population Ageing and Integenerational Transfers in Japan (huge PDF, so watch out)

Hopefully, I will have more about this later.