Understanding Japan’s Deflation: Causes, Challenges and Policy Lessons
DOI:
https://doi.org/10.26821/IJSRC.12.11.2024.121103Keywords:
Deflation, Japan, Asset bubble, Economy, Lost decade, Economic MiracleAbstract
This paper examines Japan’s distinctive inflation and deflation patterns, highlighting prolonged deflation following the 1990s asset bubble collapse and exploring the systemic issues underlying this trend. Japan’s deflationary cycle, reinforced by demographic shifts, conservative spending habits, and policy limitations, has presented unique challenges that distinguish its economy from other developed nations. By analyzing historical events, monetary policies, and fiscal interventions, this study identifies key factors contributing to Japan's economic stagnation. The paper concludes by suggesting alternative strategies and offering insights that may assist policymakers worldwide in addressing deflationary pressures within an interconnected global economy.
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