The Week (May 23)
In April, the Consumer Price Index (CPI) rose more sharply than it has in 13 years, “putting data behind the warnings that many economists and businesses have been issuing for weeks.” Inflation is dramatically here. “The question is how long it will stay.” The increase may stem from random coincidences (like a pipeline shut down and insufficient chip supply) or they could be transient symptoms of economic rebooting. But the upward swing might also prove harbinger of runaway inflation to come.
Tags: April, Businesses, Chip supply, CPI, Economists, Increase, Inflation, Pipeline, Random, Rebooting, Transient, Warnings
Financial Times (September 27)
“It is disappointing that Mr Abe chose last week not to redouble his efforts,” especially on the third arrow of structural reform, “but instead promulgate three newer arrows: ‘strong economy’, ‘support for families’ and ‘social security’. Anything that confuses his original, and clearer message risks undermining its goals.” Moreover, his original program has been working. “Japan is no longer the deflationary outlier — virtually every developed country has seen negative inflation following the recent oil price falls. When this effect is stripped out, Japan’s CPI has been growing at between 0.5 and 1 per cent, well above its previous rate.”
Tags: Abe, CPI, Deflationary, Economy, Families, Japan, Negative inflation, New arrows, Oil, Social security, Structural reform, Undermine
The Economist (August 29)
“After two years of remission, Japan seems likely to sink back into the ‘chronic disease’ of deflation…. New data are expected to show on August 28th that core CPI, the central bank’s preferred indicator of inflation, turned negative in July for the first time since the bank launched a big programme of quantitative easing… in April 2013.” Fortunately, better-than-expected data caught economists by surprise, showing level prices so Japan remains out of inflation, though just barely.
Financial Times (February 6, 2014)
“In an era when much of the world is worried about the possibility of drifting into Japanese-style deflation, one country has precisely the opposite problem: unbridled inflation.” Over the last 5 years, India’s consumer prices have been rising annually by close to 10%. “That is no small matter for the multitudinous poor, for whom escalating food prices can summon the spectre of hunger. Nor does it do much for macroeconomic stability, which India badly needs in this year of tapering and tricky political transition.” Fortunately, new central bank governor Raghuram Rajan looks “up to the task.” With his tough policies, he may prove the Paul Volcker of India.
Tags: Central bank, CPI, Deflation, Food, Governor, Hunger, India, Inflation, Japan, Macroeconomics, Paul Volker, Poor, Raghuram Rajan, Stability
