Deflationary lessons: what Japanese deflation did and did not do.(economy)
From: The International Economy
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Date: 1/1/2006
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Author: Posen, Adam
When deflation hit Japan and persisted, it was quite a shock. The loss of the central bank's apparent capabilities to do anything about it with the Bank of Japan's instrument interest rate at zero made the situation even more interesting. So did Japan's bad loan problems shutting down the credit channel of monetary policy. Monetary economists were captivated by the phenomenon, the concept of the liquidity trap was dusted off, and numerous remedies were proposed. Now that the Japanese ...
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