Chronic Deflation in Japan

Kenji Nishizaki, Toshitaka Sekine and Yoichi Ueno
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Kenji Nishizaki: Bank of Japan
Yoichi Ueno: Bank of Japan

No 12-E-6, Bank of Japan Working Paper Series from Bank of Japan

Abstract: Japan has suffered from 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 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.

Keywords: deflation; Japan (search for similar items in EconPapers)
JEL-codes: E31 E58 O53 (search for similar items in EconPapers)
Date: 2012-07-31
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Chronic Deflation in Japan (2014)
Chapter: Chronic deflation in Japan (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:boj:bojwps:12-e-6

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