deflation - 0 views
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Deflation has acted like a stealth tax cut for households and restored some sobriety to costs.
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Japan is experiencing “non-monetary deflation” on account of a national cost structure that overshot to the upside decades ago, a graying population that favors falling prices over rising ones, and a political system that doesn’t understand that deflation is a symptom of Japan’s malaise, not the cause.
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the focus has been on how bond traders will react as a nation whose debt is approaching 250 percent of gross domestic product, and which enjoys sub-1 percent 10-year bond yields, begins to produce sustained inflation. A
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The article is talking about the situation in japan. The article talk about the deflation that japan has been suffering for the past years, but is saying how japan adapt to it and benefit from it. At the end of the article talks about a paradox that is happening in Japan called the Abe's Paradox that is when a country is both suffering and benefiting form deflation so they don't now to keep it and increase the countries debt or remove it. The cause of the inflation in japan has been based on how japan has not make any polices to increase central bank polices and that the resulted in deflation. The effect has been both positive and negative, is that the nation debt has approach the 250 percent of gross domestic product. The positive effect is that how deflation helped the price levels to be stable and act like tax cut for households, and put some sobriety for cost. Also how the economic players of japan have adapted to deflationary environment and they now how to benefit from it.