Report says lack of ‘intellectual diversity’ at senior level and too wide a range of priorities led to errors and fall in public confidence
Why aren’t people taking a closer look at Japan? Their inflation rate is down 929% from last year, without adjusting the cash rate.
Why is it that the EU, UK, Canada, NZ, USA and Australia all keep trying to reach the same goal of suppressing demand until unemployment is high enough for prices to fall. It’s insane.
What I was basing my observation on: https://theconversation.com/japan-has-gone-its-own-way-on-fighting-inflation-can-nz-learn-from-a-global-outlier-210618
For them, keeping inflation under control is merely dogwhistle for keeping the working class in line and under their thumbs. The main way this happens is a recession causes fiat to lose power while the power of capital assets increase an equal amount.
Common people are barred from increasing their collective power.
Powell and the federal reserve are the main villains in this terrible economy.
It’s easy to keep inflation down when your population is decreasing by 0.5% per year and accelerating downwards, with far more people aging out of the workforce than entering it. Japan is going to be in for a world of economic hurt over the next two decades.
China’s population has peaked too, and it’s economic outlook is going to be very dire when the big age cohort currently in their 50s starts retiring in 10-15 years.
Isn’t that what people have been saying for decades? Yet the ‘economic miracle of Japan’ just keeps rolling.
https://foreignpolicy.com/2023/09/14/japan-economy-neoliberalism-east-asia-washington-consensus-imf/
Considering that their population only started decreasing about 4-5 years ago, I don’t know how “decades” is possible.
Yeah, shit is NOT good over here. Prices on basic necessities have soared but wages haven’t appreciably changed in, legit, 20 years. People are sick of Kishida and hours approval rates are in the tank because he’s raised taxes while inflation has meant basic goods is up. Japan is not a good example right now.
Here’s an article I read a few days ago on the inflation over here Notice how they leave out the cost of food and energy calculating things. Plus, that talk about:
Energy prices dropped 8.7 percent, weighed down by government subsidies for lowering gasoline and other fuel costs to support households. The fall was smaller than the previous month’s 11.7 percent.
sounds nice until you consider it had shot up between 24-48% depending on where you’re getting power from (I’m lucky. I’m in Osaka so prices only went up about 25%. They went up 48% in Hokkaido).
The BoJ measures inflation to help it manage the economy. It’s not a political tool. As an individual, changes in your cost of living are personal to you. You don’t need the central bank or the government to tell you about it.
Obviously, the BoJ isn’t focused on individuals. It wants to see what’s happening across the whole economy. Through research that is freely available, it has determined that the index provides a more reliable signal when volatile fresh food prices are excluded (because the things that typically cause these prices to change, like the weather, don’t reflect a broad shift in the economy).
You’re wrong that energy isn’t included. That sentence is referring to a different (“core-core CPI”) index, which is higher at 4% because energy prices have gone down. Japan’s energy problems are as result of the post-Fukushima shift from nuclear, largely a result of public opinion.
Put simply, CPI isn’t a measure of “cost of living“. It’s a tool for central bank policy.
Oh wow that’s insane to leave those essentials out of the calculation.
Shit isn’t good here either, energy costs increased by 20-25% in just a quarter, homelessness rising, wages have fallen in real terms over the last two decades while company profits have soared, renting is out of reach of most young people while the older generation is retiring with multiple homes. The share of GDP that goes into people’s pockets is literally the opposite of what it was in the 1950s.
Link explaining the Japanese policy?
This is the best summary I could come up with:
The Bank of England’s reliance on “inadequate” forecasting models and a lack of intellectual diversity within its most senior ranks contributed to inflation sticking at among the highest levels in decades, a Lords report has found.
In a report critical of Threadneedle Street, the powerful Lords economic affairs committee said the central bank had made “errors” in its handling of the inflation shock triggered after the Covid pandemic and Russia’s invasion of Ukraine.
Highlighting incorrect forecasts made in 2021 for inflation to cool, it said possible reasons included a “perceived lack of intellectual diversity” at the central bank.
At the time, it expected inflation to fall back as global supply bottlenecks eased, while the end of the government’s furlough scheme complicated its decision.
Energy prices were rising before the war, but then surged to among the highest levels on record after the February 2022 invasion, driving UK inflation to peak at a 41-year high of 11.1% by October 2022.
Calling for reforms to help manage future inflation shocks, the Lords report said the government should “prune” the Bank’s remit to reduce the number of issues it is focused on, while introducing a review of its responsibilities every five years.
The original article contains 462 words, the summary contains 199 words. Saved 57%. I’m a bot and I’m open source!
