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    The Japanese economy has been plagued by deflation for 12 months according to government records, threatening the country's recovery from recession. The core consumer price index fell by 1.2% during this period. This deflationary environment makes consumers reluctant to buy today as goods will likely be cheaper in the future, creating a vicious cycle of falling profits and wages. While the pace of price declines is slowing, prices are still falling which will require more efforts from the government and central bank to stimulate spending and escape deflation. The large public debt limits the government's ability to boost spending to counter deflation through fiscal policy.

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    The Japanese economy has been plagued by deflation for 12 months according to government records, threatening the country's recovery from recession. The core consumer price index fell by 1.2% during this period. This deflationary environment makes consumers reluctant to buy today as goods will likely be cheaper in the future, creating a vicious cycle of falling profits and wages. While the pace of price declines is slowing, prices are still falling which will require more efforts from the government and central bank to stimulate spending and escape deflation. The large public debt limits the government's ability to boost spending to counter deflation through fiscal policy.

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    2 views1 page

    Summary

    Uploaded by

    Tran Dnb
    The Japanese economy has been plagued by deflation for 12 months according to government records, threatening the country's recovery from recession. The core consumer price index fell by 1.2% during this period. This deflationary environment makes consumers reluctant to buy today as goods will likely be cheaper in the future, creating a vicious cycle of falling profits and wages. While the pace of price declines is slowing, prices are still falling which will require more efforts from the government and central bank to stimulate spending and escape deflation. The large public debt limits the government's ability to boost spending to counter deflation through fiscal policy.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 1

    Summary

    The latest figures - where the core consumer price index fell by 1.2% According to the
    government’s record . During 12 months Japan has been in deflation,

    Threatening the country's recovery from recession.


    Japan's economy has been periodically plagued by deflation. Chu kì của su suy thoai dãn tới
    trì trệ
    The prospect that goods will become cheaper in the future makes consumers reluctant to
    buy today.
    This leads to a vicious circle of falling company profits and wages.
    Downward trend"The pace of decline in prices is slowing somewhat, but prices are still
    falling," - But the preliminary figures for Tokyo for March showed a steeper decline. The
    capital is seen as an indicator for nationwide trends.
    "More efforts will be needed to escape deflation." The government is putting pressure on the
    Bank of Japan to further increase the money supply to solve the problem. "The Bank of
    Japan has said it will patiently maintain very easy monetary policy. They really need to do
    so for a very long time for the country to escape deflation.
    Record budget
    So, analysts said it’s take a long time before prices start rising again in Japan. pulls out of
    deflation
    But the government can’t spend more to counter deflation. Because of the largest
    industrialised world and the rising debt. Parliament passed a record $1 trillion budget, much
    of it financed by borrowing.
    The Japanese economy grew by 0.9% in the final three months of last year, or 3.8% on an
    annualised basis.
    It is vying with China for the title of the world's second-largest economy, behind the US.

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