Deflation in Japan: The Curse of Defeatism

Japan along with the rest of the world is facing an economic downturn. They are experiencing a severe deflationary problem. The new government, as well as the Bank of Japan seem to not be concerned with tackling this problem. Prices are falling and according to the Bank of Japan, may continue to fall for the next two years. This will cause the burden of Japan's debt to increase as well as cause firms and households to reduce spending. Japan also has high interest rates which does not help this situation out. The article concludes with guidelines for Japan to get out of this spiral.