Printing endless amounts of currency didn’t help much here did it:
Japan fell into deflation not because of “money printing” but because of private market failures and poor policy choices, including try to tax their way back to balancing budgets. Every time they increased their consumption tax they fell backwards - 3 times, all three times after the economy recovered a little, all three times too soon (The same fate befell FDR when he agreed to increase taxes in 1937, leading to a recession within the depression. That eased up only with huge HUGE increases of deficit spending for preparations for war and the war itself.)
Here’s a summary:
Japan’s Three Lost Decades – Escaping Deflation | Nomura Connects.
And here’s a wonderful post by Mungofitch on the Berkshire board over at Shrewdm.com talking about “deflation” and how hard it is to get out once you’ve gotten yourself in:
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