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Chronic deflation in Japan

In: Globalisation and inflation dynamics in Asia and the Pacific

Author

Listed:
  • Kenji Nishizaki

    (Bank of Japan)

  • Toshitaka Sekine

    (Bank of Japan)

  • Yuichi Ueno

    (Bank of Japan)

  • Yuko Kawai

    (Bank of Japan)

Abstract

type="main"> Japan has suffered from a long-lasting but mild deflation since the latter half of the 1990s. Estimates of a standard Phillips curve indicate that a decline in inflation expectations, the negative output gap, and other factors such as a decline in import prices and a higher exchange rate all account for some of this development. These factors, in turn, reflect various underlying structural features of the Japanese economy. This paper examines a long list of these structural features that may explain Japan's chronic deflation, including the zero lower bound on the nominal interest rate, public attitudes toward the price level, central bank communication, weaker growth expectations coupled with declining potential growth or the lower natural rate of interest, risk-averse banking behavior, deregulation, and the rise of emerging economies.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Kenji Nishizaki & Toshitaka Sekine & Yuichi Ueno & Yuko Kawai, 2013. "Chronic deflation in Japan," BIS Papers chapters, in: Bank for International Settlements (ed.), Globalisation and inflation dynamics in Asia and the Pacific, volume 70, pages 9-19, Bank for International Settlements.
    • Handle: RePEc:bis:bisbpc:70-03
    as

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    References listed on IDEAS

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    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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