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> Japan has been following Friedman's proscriptions (QE forever) for the last 20 years! I would say that Japan has been following Friedman's prescriptions unti
by ChrisGaudreau 12y ago
> Japan has been following Friedman's proscriptions (QE forever) for the last 20 years!
I would say that Japan has been following Friedman's prescriptions until now. The major difference between monetary policy before Abe and after Abe is that Abe has made it clear that he won't jack up interest rates as soon as there is life in the economy. Past governments made it clear they would take away the punch bowl as soon as there was a hint of growth.
Basically, Abe has convincingly promised to be irresponsible. And so far, it has worked to beat deflation. Many other indicators are looking better, too, but it'll take some time before we know if it really works. (Hyperinflation? Wages? and so on)
- crdoconnor 12y agoAbe committed to continue doing what Japan has been doing for the last 20 years anyhow. That is not a change in monetary policy. That is not a commitment to being irresponsible. That is just business as usual. No inflation was caused by that. The only difference is that he mixed in a BIT of stimulus spending to the mix. That actually had a real inflationary effect on the economy, although the stimulus wasn't that big so the effect wasn't that big either.