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"I applaud their efforts to show their resolve to stop deflation and spur the economy," he said.
"It is always both technically and politically dead easy to stop deflation and get rid of it, if you don't want it," Mr. Buiter said.
In a June 10 , 1934 article for The Times, Keynes explained that monetary stimulus by itself was insufficient to stop deflation and that the price-fixing instituted by the National Industrial Recovery Act was counterproductive, if well intentioned.
But the Group of 20 communiqué stated that "Japan's recent policy actions are intended to stop deflation and support domestic demand," a tacit nod to the recent round of easing.
Devaluing the Hong Kong dollar would make the territory less costly as a base for foreign companies doing business in China and could stop deflation because imported goods would tend to become more expensive here.
Ms. Matsui and other analysts say the government must instead come up with a comprehensive solution that includes not only dealing with the bad loans but also steps to strengthen the social safety net, stop deflation and improve corporate profitability.
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There, too, more could be done to convince consumers that stopping deflation is the government's overriding goal.
This is Mr Bernanke's preferred cure, but it has not stopped deflation in Japan, where long-term bond yields are 0.6%.
The LDP and the DPJ are at odds over Mr Abe's threats to curtail the central bank's independence in order to make it undertake "unlimited" monetary loosening as a way of stopping deflation.
Mr. Abe also reiterated pressure on Japan's central bank to make a firmer commitment to stopping deflation by pumping more money into the economy — a measure the prime minister says is crucial to getting businesses to invest and consumers to spend.
Mr. Abe also reiterated his desire for the Japanese central bank to make a firmer commitment to stopping deflation by pumping more money into the economy, which the prime minister has said is crucial to getting businesses to invest and consumers to spend.
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