BoJ paper examines consumer spending in low-interest rate environment
A Bank of Japan working paper, published last week, finds that higher inflation expectations do generate greater current consumer spending when the interest rate is at the zero lower bound.
The paper – Inflation Expectations and Consumer Spending at the Zero Bound: Micro Evidence, by Hibiki Ichiue and Shusaku Nishiguchi – analyses 4,000 responses to the Bank of Japan's opinion survey on inflation and spending.
The authors suggest their study is more credible than similar research conducted using
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