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Deflation and Japan

Peter Payne by Peter Payne
16 years ago
in Your Friend in Japan

For the past fifteen years, Japan has been fighting against the spectre of defure or deflation, in which prices decline in real terms rather than rise slightly year-to-year. While having things get cheaper sounds pretty cool, in reality deflation is bad because it can smother economic growth, cause factories to sit idle and cause the economy to shrink despite the fact that everyone is working hard. Since I visit the U.S. once or twice a year, I often notice when things get more expensive than they were the last time, but this certainly isn’t the norm for Japan, where prices pretty rise rarely. Actually, I can only remember a few things that actually got more expensive in the nearly two decades I’ve lived in Japan: Coca-Cola went from 100 to 120 yen, the train fares got raised once, and the shop I’ve bought fried croquettes at for years raised the price from 50 to 60 yen. (The lady was very apologetic to me.) It’s rare for prices to rise in Japan.

Tags: economyJapan

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