By: anon

anon — Thu, 11 Mar 2010 20:41:40 +0000

Japanese style deflation: Deflation has been persistent in Japan for two decades due to very low unemployment rate in Japan for the very low GDP growth rate. If GDP growth rate decreases, unemployment rate should be increased since average annual household income can be maintained in that way. But Japan did not do that. Instead Japan maintained low unemployment rate compared with other developed countries. Therefore, an annual Japanese household income has been decreasing for two decades. The solution of the Japanese persistent deflation is to give much more flexibility in the labor market.

Comments on: Japanese Q4 economic growth figures revised downwards

By: anon