Deflation caused by low growth expectations: BoJ paper
A Bank of Japan paper published Monday shows that declining growth expectations in Japan are having a significantly worsening deflation.
Takeshi Kimura, Takeshi Shimatani, Kenichi Sakura and Tomoaki Nishida, the paper's authors, compare the inflation developments in the United States and the eurozone to those in Japan and find the local evidence is consistent with the quantity theory of money, which shows low inflation results from low money growth.
However, they also observe a strong positive
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