The issue of trade friction and general tensions concerning economic policy between the United States and Japan is not a new one. For almost 20 years the issue has appeared in popular economic discussions. Sometimes events make the frictions more heated than at other times, but there is usually some manifestation of the issue. This volume presents the proceedings of a conference held in 1986, a year in which the policy frictions between the two allies were particularly heated. However, the issues discussed are of broader interest than the crises reported in the daily press. Indeed, the conference program and discussions attempt to put these crises in perspective and thereby contribute to our understanding of economic policy in a constructive manner.

The chapters presented here address three broad questions that are the source of the three topical groupings in the table of contents. The questions are:

That these questions are posed does not presume that there are definitive answers. In fact, the very issue of whether friction exists or whether there is any substantive basis for the apparent frictions expressed in both countries needs to be explored. In addition, it is possible that no response is the appropriate policy action. Indeed, some of the views expressed in this volume favor little or no policy response.

The essays in this volume are a combination of research papers, policy speeches, and discussions presented at a conference sponsored by the Center for Japan–U.S.