(5) The hypothesized way that interest costs increase is out of a concern that the govt will effectively partially default by monetizing the debt. Higher inflation. But suppose the govt decides to renege on promised entitlement benefits? Why should we believe an investor would not treat that as...
If it goes into stocks or hard assets, then nominal revenues to the govt. skyrocket. Very little debt is inflation indexed. Most importantly, we have no external obligations that are denominated in a non-dollar currency, which is the nearly universal driver of hyperinflation (yes, Weimar, Arge...
producing slightly higher inflation and substantially higher NGDP growth. I’ve argued that it’s still too contractionary because Japan remains well below its 2% inflation target. Others say the labor market is now very strong (which is true) and that no further monetary stimulus is needed. Tha...
“Despite these efforts, the financial system is still working against economic recovery. One major reason is the problem of “legacy assets” – both real estate loans held directly on the books of banks (“legacy loans”) and securit...
Japan govt lays groundwork for more stimulus spending to offset tax hike Reuters Staff 2 MIN READ TOKYO, March 29 (Reuters) – Japan’s government began laying the groundwork on Thursday for big spending next year to offset the impact of a planned nationwide sales tax hike. ...