Maksim Brukouski's study was inspired by the postwar economic history of Japan with a major
focus on trade disputes with its largest overseas partner the United States of America
accompanied by some nearly unique and 'mysterious' phenomena like decade-long deflation the
liquidity trap and the high yen recession that could be observed in Japan after the collapse
of the Bretton Woods system. Commercial pressure to appreciate the yen associated with trade
tensions between Japan and the US is a major non-mainstream explanation of the problems
mentioned above. Despite many controversial discussions about this issue there has been little
theoretical research analyzing the role of political pressure in an affected economy and the
channels through which it spreads its influence. Brukouski's book provides two instruments to
resolve these gaps: a comparative static model and an extension to a baseline New-Keynesian
DSGE framework. His analysis of the short- and long-run implications of mercantile pressure for
monetary policy and the economy challenges the popular view that the exchange rate influences
the trade balance in a predictable way evaluates pressure costs and effectiveness and reveals
new perspectives on the possible origins of Japan's problems associated with trade disputes.
The results of his study serve as a warning for other countries with a similar foreign
commercial reality for example China against repeating the same policy mistakes.
