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Yes I am aware of this point of view. I think, the trigger for the lost decade can be attributed to the housing bubble. Yet, the almost complete stop in the GDP
by emanuer 15y ago
Yes I am aware of this point of view. I think, the trigger for the lost decade can be attributed to the housing bubble. Yet, the almost complete stop in the GDP's growth and the complete immunity to monetary stimuli (~0% interest rate for 20 years) are impossible to explain by the bubble collapse.
- bzbarsky 15y ago~0% interest rate doesn't imply monetary stimulus. At least not when the rate gets hiked as soon as inflation goes over 0% or so, which is what the Bank of Japan has been doing. In other words, BoJ has _explicitly_ targeted stable to falling prices in its monetary policy. That's not monetary stimulus; that's just contractionary policy. What interest rate target they use to implement that policy isn't really relevant.