Friday, May 10, 2019

Why was Japan so unsuccessful in solving the problem of deflation over Essay

Why was Japan so unsuccessful in firmness the problem of deflation over the past decade - Essay ExampleOn 29 December 1989, the Nikkei poorly(p) at 38, 916 after a five year return of 237%. The rate in June of 2008 was at 14, 354 which is a startling 63% lower than the 1989 figure (Harrison 2008). According to the International Monetary Fund (2006), Japan was experiencing retrieval from its previous declining position, but by 2009, the International Monetary fund showed recognition that the economic downturn of 2008 had muffle progress and the deflation was still a pervasive issue. As Shown in the graph examples in figure 1, two the real estate market and the stock market require shown steady deflationary trends since 1990.There have been a series of attempts to remedy the problem of deflation in Japan. These attempts include fiscal expanding upon, reduction of interest rates, hanker depreciation, and finally a zero interest rate program followed by a quantitative expansion pr ogram (Greenwood 2010). Unfortunately, these programs have all been ineffective in providing relief from the ongoing deflationary period. Greenwood (2010) states that the lack of recovery is due to poor political and economic leadership, an unwillingness to adopt unorthodox strategies, mistakes at the technical level, and the fashion of a balance sheet recession.An expansionary fiscal policy adopted by a disposal is marked by measures that are taken in order to create increased economic stabilization through governmental policies intended to create economic stimulus. In 1981, Yasuhiro Nakisone, Prime Minister of Japan, instituted polices that were stringent for the Japanese economy. However, by 1986, Naksone believed that these policies would require some adjustment in order to avert the looming crisis. A private consultive group headed by Bank of Japan Chairman Maekawa Haruo and commissioned by Nakisone submitted a report usually referred to as the Maekawa Report which states that the Japanese economic policies and

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