On Sat, 25 Sep 1999, Doug Henwood wrote:
> Michael Pollak wrote:
>
> >I have a question. What has Japan's inflation or deflation rate been for
> >the last couple years? Is it changing at all?
>
> 1980s 2.1%
> 1991 3.3
> 1992 1.7
> 1993 1.2
> 1994 0.7
> 1995 -0.1
> 1996 0.1
> 1997 1.7
> 1998 0.6
> 1999 -0.1 (July)
So the economy has grown during deflation. Since deflation is an increase in real interest rates, could it possibly be that a rise in expected deflation accounts for the recent increase in capital inflows? Simply in response to rising real returns on yen deposits? Which in turn leads to a rise in the yen until its expected depreciation equals out the difference in yields? Or would that be too simple?
Michael
__________________________________________________________________________ Michael Pollak................New York City..............mpollak at panix.com