δείτε και τι λέει ο Γιαπωνέζος, σε σχέση με τα δικά του
The monetary base of Japan was increased by 90%, between 1997 and 2010. Money supply increased by 30%. And prices declined by 3.7% as I mentioned earlier. In the case of the United States, monetary base expanded by 140% between 2008 and 2010. Money supply increased by 10%. And the level of consumer prices increased only 1%, and the annual inflation rate of core consumer prices decreased from 2.5% to 1.0%. So the proposition has been disproven by the facts. Central banks have increased the monetary base dramatically, but we didn't observe an increase in the consumer inflation rate. So that's my answer to your question.
What has experience taught you? (λύση...)
If we look at the correlation between the trend growth rate and the expected inflation rate, we observe a very close, positive association
For instance, in 1998, the year-on-year wage growth rate was between minus 3% and minus 4%, which is unthinkable in the U.S. or Europe.
You have argued that the BOJ has employed innovative policies—the 0% interest, the commitment to maintain the interest, the balance sheet expansion, the quantitative easing. And yet the economy did not return to vitality. Why not?
Our innovative measures were effective in the following sense. First, they were effective in maintaining financial system stability. I'm talking about the quantitative easing part of our policies. Also, as you mentioned, we committed to continuing with a zero-interest policy, until consumer price inflation becomes positive on a sustained basis. And also, we purchased risky assets. These measures were effective in creating very accommodative financial conditions, which shored up economic activity.
But the underlying trend of declining trend growth was powerful.
One is the decline in productivity caused by the bubble bursting and the delay in changing the business model to adapt to globalization.
The second reason is rapid aging, the rapid decline in the working population.
We have identified several risk factors. But the major risk factors are two. One is the downside risk factor pertaining to industrialized countries. Basically, it is a balance sheet adjustment in Europe and the United States. And upside risk is the emerging market economies. Now, commodity prices have increased. When we assess the impact of rising commodity prices, we have to look at this issue in totality. The reason why commodity prices are increasing is basically the high growth in emerging market economies. Therefore, exports to those emerging market economies are now increasing. And also, the investment income coming from foreign direct investment into those economies is increasing. These are positive factors. At the same time, the worsening of terms of trade depresses spending internally. We have to weigh these factors.
So we need fresh entry and also we need the exit of inefficient firms. But given very low interest rates and given abundant liquidity, there is no strong incentive for those inefficient firms to exit the market.
central banks and regulators have to grasp the risk profile at the macro level.
What has experience taught you? (λύση...)
If we look at the correlation between the trend growth rate and the expected inflation rate, we observe a very close, positive association
For instance, in 1998, the year-on-year wage growth rate was between minus 3% and minus 4%, which is unthinkable in the U.S. or Europe.
You have argued that the BOJ has employed innovative policies—the 0% interest, the commitment to maintain the interest, the balance sheet expansion, the quantitative easing. And yet the economy did not return to vitality. Why not?
Our innovative measures were effective in the following sense. First, they were effective in maintaining financial system stability. I'm talking about the quantitative easing part of our policies. Also, as you mentioned, we committed to continuing with a zero-interest policy, until consumer price inflation becomes positive on a sustained basis. And also, we purchased risky assets. These measures were effective in creating very accommodative financial conditions, which shored up economic activity.
But the underlying trend of declining trend growth was powerful.
One is the decline in productivity caused by the bubble bursting and the delay in changing the business model to adapt to globalization.
The second reason is rapid aging, the rapid decline in the working population.
We have identified several risk factors. But the major risk factors are two. One is the downside risk factor pertaining to industrialized countries. Basically, it is a balance sheet adjustment in Europe and the United States. And upside risk is the emerging market economies. Now, commodity prices have increased. When we assess the impact of rising commodity prices, we have to look at this issue in totality. The reason why commodity prices are increasing is basically the high growth in emerging market economies. Therefore, exports to those emerging market economies are now increasing. And also, the investment income coming from foreign direct investment into those economies is increasing. These are positive factors. At the same time, the worsening of terms of trade depresses spending internally. We have to weigh these factors.
So we need fresh entry and also we need the exit of inefficient firms. But given very low interest rates and given abundant liquidity, there is no strong incentive for those inefficient firms to exit the market.
central banks and regulators have to grasp the risk profile at the macro level.
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