(The 2009 stimulus package decreased the tax to bolster consumer spending. During fiscal cliff negotiations, lawmakers elected not to stop an automatic, 2 percentage point hike).
Indeed, on Thursday, to entice customers who had withdrawn money to come back, the bank offered them a 0.5 percentage point hike in interest.
Every percentage point hike in long-term interest rates cuts growth by 1.4% a year, according to estimates by the Japan Research Institute.
The 0.25 percentage point hike was the first increase in short-term interest rates in almost a year, and only the second time within the past 10 years.
Despite a two percentage-point hike in the country's key lending rate to 12.5%, the battered currency plunged to a record low against the dollar, in effect devaluing the baht by 15-20% in a single day.
The current path threatens our children and grandchildren with a wrecked planet, but the Very Serious People in Washington would rather save them from the risk of a two-percentage-point hike in the social security tax somewhere in the next 50 years.
Industrial production typically drops by about 1% in the first months after an uncertainty shock, Mr Bloom finds, an effect akin to a seven percentage-point hike in interest rates, before rebounding strongly later (see chart 2).The wobbliness of investor confidence may be one reason for the paradoxical strengthening of the yen (from ¥83.30 to the dollar to ¥76.25) in the wake of Japan's disaster.
Jean-Michel Six, an economist at Standard and Poor's in London, notes that the three-percentage-point hike in Germany's VAT represented a major uncertainty for the economy going into 2007 as well as a bet by Merkel that the increase would not act as too much of a brake on economic acceleration.
Howard Archer, chief European economist at IHS Global Insight, said that he expected there to be at most one 0.25 percentage point rate hike in 2015.
He also voted for Obamacare in 2009, which included a 3.8 percentage point tax hike on investment income. .
