The Inflation and Deflationary Trends in the Global Economy, or 'The Japanese Disease' is Spreading
Journal of Globalization Studies. Volume 5, Number 2 / November 2014, pp. 152-173
22 Pages Posted: 30 Apr 2015
Date Written: October 30, 2014
Recently among numerous concerns over the European and partly American economies the danger of deflation is rather frequently mentioned. The scholars cite the Japanese economy which has been suffering from deflation for the last two decades despite the large investments in economy and the government's efforts to increase inflation. Similarly, notwithstanding many trillions of dollars, euro, pounds and yen that were invested in economies over the past few years, the inflation in the Western countries still remains low.
On the whole, there are reasons to maintain that European countries suffer from ‘the Japanese disease’, and this disease can progress or even become chronic. The USA, although to a lesser extent, has the signs of the disease as well.
As a result, the financial infusions can become permanent, as it happened in Japan. The present paper defines the reasons of the problem, explains the irregularity of the inflation-deflation processes in the world and also gives some forecasts.
Keywords: inflation, deflation, quantitative easing, prices, investments, center, periphery, the Japanese economy, demand, economic laws
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