"Theory tells us why Japan didn't inflate" Really? News to most! But two things may explain it - business made a big shift from heavily indebted to positive cash, mirrored by the state's plunge into the red, intermediated by the BOJ... 1/x
In effect, corporate debt was slowly washed to the government whose IOUs were bought by the #centralbank. Reserves issued v these offset bank deposit liabilities to the now flush businesses happy to hold them because #NIRP destroyed transaction/savings balance differences 2/x
Meanwhile, much of #Japan's newly created money was swapped up and used to finance speculative purchases elsewhere in the world - as shown for Grand Cayman 3/x 
Moreover, a country which used to be wondered at for its eye-wateringly high prices, but which is highly internationally competitive and capital intensive, should probably have seen steady, beneficial, productivity-led price declines so #inflation has been 'hidden'. 4/x
Note also that, adjusted for the working age population, real national income in #Japan has compared favourably to the other large developed nations over most of the past quarter-century, while jobs/vacancies hits recurring new highs.
Just what IS supposed to be its trouble? 5/x
Just what IS supposed to be its trouble? 5/x
@threadreaderapp unroll
BTW The regular #BOJ survey shows NO signs of a 'deflationary mindset', NOR does it show people begging for their purchasing power to be more rapidly eroded at the behest of idiot savant monetary cranks!
