5 ms·

Given that the BoJ literally can't seem to generate inflation no matter how hard it tries, this seems like a no-brainer. As close to helicopter money as they've

Given that the BoJ literally can't seem to generate inflation no matter how hard it tries, this seems like a no-brainer. As close to helicopter money as they've yet come.

Proven 6y ago
No brainer for what (or to who)? Gainfully employed people already can't buy enough with their paychecks you want to increase their cost of living. What good is that going to do? It's funny (but it's becoming horrifying, especially in this election year in the US) how economically clueless most people are.
ShorsHammer 6y ago
Technological advancement really is a curse. Given that Japanese quality of life has barely moved in decades despite the economic hardships perhaps it's time for regulators to stop focusing on the arbitrary 2-3% inflation metric which causes so much distortion in monetary policy? Why exactly can the inflation range targeted by Central Banks never change?
- pgz 6y ago
  I always suspected governments desperately seek 2% inflation because they are long term borrowers.
- gimmeThaBeet 6y ago
  There's a bit of truth there, not that my opinion means much, but Japan's biggest issue is that they haven't invested enough in the people, and by extension supporting domestic growth/consumption. And when I say Japan here, that's Japan, the government, and more importantly what is called "Japan, Inc." Corporate Japan has amassed an absolutely staggering amount of money over the past 10/20 years, they haven't done enough with it, and Abenomics (though I think they honestly know it's an issue, and have tried to address it) hasn't managed to crack that nut. Now, as to the second point concerning inflation, I maybe naively think that's easier to talk to. I think the first idea isn't that you want inflation, it's that you don't want deflation. Prices have to do something, and deflation tends be be very unfun, and has proven tricky to get along with. It's just that societies have found it easier to fight excessive inflation than any amount deflation, so you end up with 'price stability' being interpreted as 'inflation, but not that much'. Ideally imo you're running above 0 with some headroom. I also think inflation is sort of is Darwinian-ly helpful (though it may be very uncomfortable/destructive) in that it kind of naturally gives a mechanism where everything is being constantly re-evaluated over time. In a world where everything gets more expensive over time, if you can't get more efficient, or maintain your pricing power, you're being compressed. And again, that's not very fun in the context of wage growth, it's people's lives and livelyhood. Debts also become nominally cheaper to service over time. A lot of stuff works out cleaner when you have inflation vs deflation, but there's still unfun aspects. One thought experiment I have is a little about investment/consumption, and debt. If you want to go buy something you need, and tomorrow the price will be higher (inflation ad infinitum), when is the best time to buy it? Now. If you want to go buy something you need, and tomorrow the price will be lower (deflation ad infinitum), when is the best time to buy it? Never? How long do you wait?
  - machiaweliczny 6y ago
    They could just print some money and pass then to people (like UBI) to maintain healthy inflation. Guess there are no laws to enable that.
    - FartyMcFarter 6y ago
      UBI is not happening, but printing money to pass along to people and businesses still seems to be happening anyway.
- thewarrior 6y ago
  This is actually false. Japan’s per capita GDP is still slowly going up. What’s happening is that slow down of population cancels it out in total GDP

Given that the BoJ literally can't seem to generate inflation no matter how hard it tries, this seems like a no-brainer. As close to helicopter money as they've yet come.

Proven 6y ago

No brainer for what (or to who)? Gainfully employed people already can't buy enough with their paychecks you want to increase their cost of living. What good is that going to do? It's funny (but it's becoming horrifying, especially in this election year in the US) how economically clueless most people are.

ShorsHammer 6y ago

Technological advancement really is a curse. Given that Japanese quality of life has barely moved in decades despite the economic hardships perhaps it's time for regulators to stop focusing on the arbitrary 2-3% inflation metric which causes so much distortion in monetary policy? Why exactly can the inflation range targeted by Central Banks never change?

pgz 6y ago
I always suspected governments desperately seek 2% inflation because they are long term borrowers.
gimmeThaBeet 6y ago
There's a bit of truth there, not that my opinion means much, but Japan's biggest issue is that they haven't invested enough in the people, and by extension supporting domestic growth/consumption. And when I say Japan here, that's Japan, the government, and more importantly what is called "Japan, Inc." Corporate Japan has amassed an absolutely staggering amount of money over the past 10/20 years, they haven't done enough with it, and Abenomics (though I think they honestly know it's an issue, and have tried to address it) hasn't managed to crack that nut. Now, as to the second point concerning inflation, I maybe naively think that's easier to talk to. I think the first idea isn't that you want inflation, it's that you don't want deflation. Prices have to do something, and deflation tends be be very unfun, and has proven tricky to get along with. It's just that societies have found it easier to fight excessive inflation than any amount deflation, so you end up with 'price stability' being interpreted as 'inflation, but not that much'. Ideally imo you're running above 0 with some headroom. I also think inflation is sort of is Darwinian-ly helpful (though it may be very uncomfortable/destructive) in that it kind of naturally gives a mechanism where everything is being constantly re-evaluated over time. In a world where everything gets more expensive over time, if you can't get more efficient, or maintain your pricing power, you're being compressed. And again, that's not very fun in the context of wage growth, it's people's lives and livelyhood. Debts also become nominally cheaper to service over time. A lot of stuff works out cleaner when you have inflation vs deflation, but there's still unfun aspects. One thought experiment I have is a little about investment/consumption, and debt. If you want to go buy something you need, and tomorrow the price will be higher (inflation ad infinitum), when is the best time to buy it? Now. If you want to go buy something you need, and tomorrow the price will be lower (deflation ad infinitum), when is the best time to buy it? Never? How long do you wait?
- machiaweliczny 6y ago
  They could just print some money and pass then to people (like UBI) to maintain healthy inflation. Guess there are no laws to enable that.
  - FartyMcFarter 6y ago
    UBI is not happening, but printing money to pass along to people and businesses still seems to be happening anyway.
thewarrior 6y ago
This is actually false. Japan’s per capita GDP is still slowly going up. What’s happening is that slow down of population cancels it out in total GDP