Wednesday, January 20, 2010
Japan Gives Downbeat Forecast, Warns of Deflation
This article from www.cnbc.com explains some of the economic woes facing Japan. After reading this, we can draw some parallels between the USA and Japan. Japan is currently facing a mild deflation of prices and large job losses across the island country. The Japanese government is depending on the Bank of Japan to help fight against the deflation and form a better monetary policy. The deflation hurts company profits because the consumer will wait to see if prices will drop more. Industrial output is increasing but core machinery orders are decreasing. This is a fragile economy with limited resources but can almost be seen as a very small reflection of the United States.
Subscribe to:
Post Comments (Atom)
1 comment:
I think it is interesting the article pointed out how the BOJ was reluctant to use the word "deflation".
Nonetheless, it is good that Japan has learnt from its past economic slump that lasted a decade where Japan central bank took way too long to acknowledge and work on reviving the economy. Although BOJ has stated that it is prepared to act "swiftly and decisively", im wondering if culture has any role to play in this- this meaning the difficulty the Japanese have on being able to quickly acknowledge the presence of a problem.
Post a Comment