Japan has not sufficiently 'wasted' all that deficit spending

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Posted by Winslow R. (69.232.79.238) on 00:28:14 10/24/07

In a recent paper, Defining Price Stability in Japan: A View from America, we argue that the Japanese CPI is computed using methods that tend to overstate true inflation and that it differs markedly from a true cost-of-living index. Using a more sophisticated methodology the one used in the US inflation in Japan would be running at around minus 1%. This implies that between 1999 and 2006, deflation was probably double that suggested by the official statistics and that Japan is still immersed in a general deflationary environment. Moreover, if we compare the Japanese CPI to a true cost-of-living index, the gap widens to about 1.8 percentage points per year.

http://www.voxeu.org/index.php?q=node/624

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Subject:	Re: Japan has not sufficiently 'wasted' all that deficit spending
Comments:	: In a recent paper, Defining Price Stability in Japan: A View from America, we argue that the Japanese CPI is computed using methods that tend to overstate true inflation and that it differs markedly from a true cost-of-living index. Using a more sophisticated methodology the one used in the US inflation in Japan would be running at around minus 1%. This implies that between 1999 and 2006, deflation was probably double that suggested by the official statistics and that Japan is still immersed in a general deflationary environment. Moreover, if we compare the Japanese CPI to a true cost-of-living index, the gap widens to about 1.8 percentage points per year. : : http://www.voxeu.org/index.php?q=node/624
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