Re:Japan's Abe is the world's best leader right now?
by Pitarou on Monday June 16, 2014 @08:02PM
(#7902171)
If you're right about that, Abenomics is doomed to fail!
And it's an interesting coincidence that inflation has finally started to happen again in Japan.
Re:Japan's Abe is the world's best leader right now?
by Amezarak on Monday June 16, 2014 @08:22PM
(#7902224)
Japan has been engaged in QE for a long time. Abenomics involves more than QE. Recent experience (and older research, c.f. Krugman) shows monetary policy simply isn't going to make any real difference in situations like this. It's better than _nothing_, maybe, and might hold you steady, but that's about it.
That said I don't think Abenomics is going to be a resounding success. There's just not that much changing in terms of fiscal policy, which is the only thing that's going to have real short/medium-term impact. There's a little, and it's an improvement, but not a lot. So I'd expect to see small gains.
Elsewhere you mention concerns about the rate of increase in Japan's monetary base. The US has quadrupled its monetary base since 2008. [1] The US has experienced everything from very low deflation to very low inflation since 2008. The trendline on the Consumer Price Index hasn't changed _at all_. [2] The current US inflation rate is 2%.
And inflation is, at least, a relatively easy problem to deal with economically, barring some political/military/resource crisis. It is certainly not an evil in itself.
[1] http://research.stlouisfed.org/fred2/series/BASE/ [2] http://research.stlouisfed.org/fred2/graph/?id=CPIAUCSL