Economy - Discuss Japan

Archives : Economy

No.15
Economy, Nos.13-15  Mar. 6, 2013

(JAPAN POLITICS CHANGED?) 2% Inflation Target Is Correct Choice to Seek Economic Growth Led by Domestic Demand

Photo : Iwata Kazumasa

The 2 percent inflation target set by the government and the Bank of Japan (BOJ) is an appropriate level. The BOJ’s major shift in its monetary policy is a great step toward overcoming deflation. The new government of Prime Minister Shinzo Abe has asked the BOJ to adopt an inflation target of 2 percent and the bank has accepted it, underscoring a significant change in its policy as it had previously held to a goal of “1 percent for the time being.” I have estimated that the most appropriate level of inflation is 1 percent to 2 percent, based on the following grounds.... [Read more]