Title: Why did prices in Japan hardly decline during the 1997-98 recession?
Abstract: Recently, the United States and European economies have been enjoying stable inflation together with continuously diminishing output gaps. Presumably, most of the participants in this meeting will discuss channels that suppress the rise in prices, such as the enhancement of productivity led by information technology, especially in the United States, or changes in wage-setting behaviour. Turning our eyes to Japan, however, we can find contrary developments in prices. The Japanese economy was on the brink of a deflationary spiral in 1998 as the output gap expanded rapidly and the risk of negative interaction between economic activity and financial stability mounted. But, in fact, prices did not fall as much as would have been suggested by classical estimates of the output gap. The main purpose of this paper is to try to find the factors behind these price developments in Japan.
Publication Year: 2001
Publication Date: 2001-01-01
Language: en
Type: article
Access and Citation
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot