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What is the cause of deflation?
Japan's overcapacity -- or "too many goods chasing too many consumers" -- is the cause of deflation, said Mr. Bevacqua, of Commerz Securities.
But the real cause of deflation is insufficient demand and the cure is macroeconomic stimulus.The Bank of Japan insists that monetary policy does not work once interest rates hit zero.
The fundamental cause of deflation, he said, was the protracted downward trend in Japan's underlying GDP growth, caused both by the decrease in the number of workers and declining productivity growth.
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Now, a new cause for concern is growing: the flat trajectory of prices, which might metastasize into a full-blown case of deflation.
As long as Japan fails to tackle the root causes of deflation, it may simply have to live with a strong currency.
Link up the causes of Deflation.
I see no reason to sacrifice my career to the cause of grade deflation.' " In faculty lounges, anecdotes like these are as common as Obama supporters.
A crucial cause of the deflation, chronic price declines, that racked Japan's economy in the 1990s was an oversupply of production capacity, which forced companies to keep cutting prices.
Whatever was the cause of the deflation, the result is that the Nets (6-7) slipped below.500 and a missed chance to take advantage of a rare off night from Kobe Bryant.
But for falling oil prices to be a cause of "bad deflation" rather than "benign disinflation", consumers and firms would have to save rather than spend their windfall from lower energy costs.
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