Quote:
Originally Posted by wantasian
I know -- but the Japan yen has also been constantly increasing in value over the years -- and Japan has been having deflation (I think because of its strong yen). A stronger currency should lead to deflation--unless it's just the U.S. dollar dropping on its own.
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Japan is not a typical example. The Yen has been rising constantly since 1983 and the US$ is now worth less than 1/3rd what it was then. Deflation has been caused by the Japanese propensity to save and reduce personal consumption. The Japanese government has tried all sorts of measures to increase domestic spending, but none of it has worked. I know of no other county with similar economic statistics.