The post-Black Death period (1350-1450) was a period of sustained price deflation. Similarly, when the plague returned to Europe in the seventeenth century, it was followed by a period of price deflation. More recently, Japan has experienced deflation over a period of several decades.
In Japan? What got cheaper in Japan? Due to deflation nothing to my knowledge. I can speak of the period between 1997 and 2021 with confidence as I have been in or to Japan in every single year during that period. Most products increased in price and that a lot more than Japan CPI suggests. Pretty much the only things that are cheaper than before is clothing. But not because of deflation but because low cost and hence low quality products (such as made in China) were nowhere to be found in Japan until the early 2000s.
It was my understanding that the inflation of prices that you see is due to depreciating value of the Yen. Whereas inflation needs to be a broad-based rise in prices. So with that being said, clothes should be rising in prices also. I very well could be wrong. That is how I interpret it.
Still bracing for "The powers that be" to attempt to guide the economy. laise faire economics will respond faster then any intervention by the reserve. Japan's lost decade was unavoidable. I believe the post heading should have been titled hyper inflation. Akuma Lessoned learned from the Weimar Republic
Where do you see a depreciation of the yen long term? 110 levels against the usd seem very reasonable to assume as average over the past 25 years. Perhaps 115?
That could have been a misstatement. With that being said, the Japanese deflation has been written about. See: https://www.bis.org/publ/bppdf/bispap70c.pdf https://ideas.repec.org/p/red/sed013/1163.html And it seems that the debt fueled stimulus measures the gov't embarked on does not provide the inflation that would be good
I know it has been written about but it's nowhere witnessed in the actual pricing of products and services. This dichotomy was precisely my point. To your latter point, I have actually been making this argument for almost 2 decades now, which is that the relationship between inflation and funding in circulation only holds if funding is invested in innovation that allows workers to participate, NOT increases in productivity in which workers don't participate. Ai and other automations disable workers from any participation in innovation and productivity increases. Hence workers have less in their pockets to purchase products and hence demand for products and services is not increasing. That's why we don't see inflation. The huge mistake of this century is the continued belief by Central banks and politicians that more money will increase innovation and investment in productive assets. That only holds until actual profitable investments have been funded. The rest ends up in unproductive assets and negative yielding investments. None of that benefits society and hence employees. That is why I have been saying that the absolutely most important aspect of innovation and automation and ai is a philosophical rethink how society at large benefits from those investments and not just a few dozen entrepreneurs only. Right now we are in an epic speculative bubble in virtually every aspect of life. I claim that around 30-40% of all employees are artificially held in employment through laws and regulations. Businesses actually do not need them anymore. In addition the synthetic funding programs by governments of unproductive and the unemployed is steadily increasing, but not at the cost of those few who hold the entire power of the world in their hands but it is debt that is enforced onto the entire society. In reality this is all just borrowing time, a virtual circle to keep many alive just for another day. A true rethink must happen but it has not so far because governments are more interested in handing out what the broad population demands. The TV in most peoples' homes is on all day long. Soon you can buy vapors and breathalizers that supply you with a constant dose of thc all day long to ensure you are high enough to not drown in your sorrows. If this is not a sure sign that the 1%ers hold the rest in their firm grip then I don't know how much more naive one can be.
country gets old (like an old man is deteriorating with age, which is equivalent to deflation I think).
The few dozen will probably hold AI powered manufacturing and just trade with eachother if needed, society at large can go back to living in cave.