Group items tagged

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.

This article is concerned about how Japan had been mired in a malaise brought on by falling prices and a strong yen for years, resulting in deflation in the economy. The economy's prospects have brightened significantly since Prime Minister Shinzo Abe announced fresh spending by the government and encouraged the central bank to unleash a tidal wave of asset purchases, an approach to decrease deflation. In order to defeat deflation, Japan has submerged into increasing the country's tax consumption and are contemplating whether or not to increase the tax consumption to 10% by 2015.

Professor Wakatabe says that if the tax were increased, it would slow down the process of recovery from the recession. now the deflation rate is going down, driven by the personal consumption, which is good, but if the tax were raised, this would slow down the recovery.

This article discusses about the recent (August) increase of inflation in Japan, after a deflation that had been lasting for fifteen years. The labor market is very tight and companies have been starting to raise wages, which would indicate that prices will still rise, leading to Japan reaching its goal of a 2 percent inflation rate. Japan has come through recession in 2012, and prices raising tend to indicate that Bank of Japan's monetary stimulus and reflationary policies have been bringing improvements to the economy.  The fact that inflation has been increasing lately will have absolutely a positive effect on Japan's economy, which has grown by a third between April and June. What Japan needs to focus on now is keeping the inflation rate stable and not letting it be affected by disinflation. Prime Minister Abe has been pressuring employers to raise wages, which it might not be the best move, since it will reduce their competitiveness. In the long-run, if the inflation is kept at a normal and stable percentage it will surely be positive for Japan's economy.