Economic School communication 1

Do you My name still a rough, do you say as a crude stand out, and there is a feeling rough OH DEAR, but I would appreciate a little bit of time acquaintance everyone. Talk of inflation targeting. Doubts about inflation targeting is growing recently. The inflation targeting established government and the central bank is the inflation target (inflation target), with measures policy necessary to achieve them, a number of major countries including Japan have adopted. The suspicion against inflation targeting is "not a do not be inflation control?" It is a suspicion that. Also in this newsletter, we have questioned the effect of inflation targeting from Higashida Tsuyoshi teacher earlier. [Higashida Tsuyoshi] bombshell of Prime Minister Shinzo Abe. Senkaku happens to http://www.mitsuhashitakaaki.net/2013/06/19/korekiyo-49/ [Higashida Tsuyoshi] now, that the United States of economists are saying http://www.mitsuhashitakaaki.net/2012/09/19/korekiyo-9/ And Western inflation rate has continued to fall to below the target. The US consumer price the first time in six months minus http://www3.nhk.or.jp/news/html/20131121/k10013221001000.html Eurozone inflation rate of, and below to clarify the price stability level = ECB director http://jp.wsj.com/article/SB10001424052702304894104579205473693067480.html According to the above article US goal 2% → record 1% EU goal 2% → record 0.7% Sure we have targets and results will differ significantly. Moreover, this trend has continued for more than the past year, it has gradually increased divergence. In other words, it is that the countries do not strike an effective hand against the divergence of goals and achievements. Now I think that there is no even is said to be the "you? Not it not be inflation control" way, but why is not going nicely inflation targeting. It is what is done in each country now I a not a "true inflation targeting". By monetary policy, such as a central bank interest rate manipulation and quantitative easing, it is inflation targeting has become mainstream now to try to control the inflation rate. However, as inflation rate of everyone you know it does not have to mean determined only by quantity of money. How much Issuing the money, if not used to become the GDP inflation rate is not affected. Assuming because to control the rate of inflation by monetary policy, it is thought to be a fairly reckless idea. But monetary policy, the experts, inter alia to defend the quantitative easing to expand the theory, such as the following. Says "the central bank is expected to be committed market inflation the inflation target, asset prices such as stocks rise first. Then, to improve the balance sheets of companies and households, investment and consumption is activated to inflation rate Rise." This is what is referred to as a "wealth effect", but in fact this wealth effect what I am accurately represents the weakness of monetary policy. It is that the asset price rises prior to the inflation rate and the wealth effect. That is, monetary policy is that the rise of excessive asset price before reaching the inflation target, in other words there is a possibility that caused the bubble. Western Despite the low inflation rate, it is not Uchidase further monetary easing. On the contrary from being discussed is such thing as an exit strategy of monetary easing is none other than to because they fear a bubble. Only monetary policy would be to pincer attack on deflation and the bubble, it has Arieru enough that it does not Tadoritsuke the target inflation rate. Alternatively, because deflation only monetary easing might What this story. We aim to Mecha Mote fine macho so sheltered frail health is to suggestion Ichinen. Bean sprouts Mr. plans straightforward. Anyway, eat eating spree eat. Of course people around you advice as "When the exercise also?", But bean sprouts kun will replied. Because not enough nutrition "Now the I is sprouts. The'm neutral in body weight because would decrease Bung fat increased muscle even if only movement in it. And if to eat a lot, actively coming out gradually Genki move around as to become. I come with nature and muscle also doing so. " How is it? It would be completely lazy. After all, you do not get out of bean sprouts regime. It 's it is Doshigatai not reluctant to exercise is kneaded especially uh's coder and quibble. We slack. Slack is Dell Fleming. In such a thing, arguendo longing fine macho even can sprout departure is a dream. On the contrary only it will become to just continue to bulge and bubbled. Joke has passed but, So you will can control the How to Once inflation rate. It is still "by issuing the currency, the government is borrowing, use" but it is. Government spend money, so-called fiscal stimulus Unlike funds for supplying monetary easing in private, direct access to the rate of inflation rather than the asset prices over. If announced the government to the public business of 200 trillion yen, people will be confident rather than expected inflation. However, to purchase government bonds the central bank issued by the government by issuing the currency directly, it has been prohibited is called financial finance. (However emergency is OK. Would not it an emergency I deflation ...) Why say that it either is prohibited "is ... to Haipainfure will not cock a halt of government spending." It's right. If so, if in fact that can be financial finance to reach the inflation target, nothing there is no problem. At the same time as the financial finance is the key to inflation targeting, inflation targeting and is also a key that allows the financial finance. Japan of deflation should do more and more financial finance. Next, we will consider the case of inflation. The end stop the financial finance Once reached the target rate of inflation, the need to increase the supply capacity without. At that time what is the turn of deregulation and trade liberalization. When inflation will sell it only made If you make. Let's great expectations in the private sector of vitality. (However, care must be taken to security and rent-seeking, but) Ie it's the real inflation targeting is carried out using all the "Three Arrows". When Abe administration has announced the three arrows, this is not even done yet anywhere in the country, but is what I was impressed to be true of inflation targeting the world's first, reality had been very different. It is likely to become the same as that other countries are doing that you are going to be eventually carried out in Japan now. Clogging at the same time the monetary easing and structural reforms, and it is those that do fall apart. As a result Europe is what happened. Expansion of unemployment and inequality, is serious. Monetary policy is stalemate Between of deflation and bubble, structural reforms in the state in which there is a deflationary gap will poor citizens. Michael Moore's film "Sicko" is the catch copy of "scary American medical than terrorism", truly real "faceless dictator," such as, but is a documentary feel, Cuban pediatrician Dr.Aleida in its final stage Guevara has said this. "The US have forgotten the important thing. It is, if the country has become rich increase productivity, the country thing that should care the minute more people." In other words, (When the inflation rate is down) After raising the supply capacity in deregulation is that please the fiscal stimulus for the minute people in employment and income. Minute This is you increase the supply capacity in other words, we can say and can finance finance by the currency issue as a bonus. The truth of the macro economy that is not every country obtained form still in the world, but is also ironic because pediatrician socialist countries are told, is a big government than global capitalism aimed at small government society Perhaps such things rather natural is because those principles come true to people's welfare. Of course not mean that accustomed to socialism, people work diligently, the country to support the people with full force. Is that let's regained such commonplace economy. The first country that has taken on a real inflation targeting on in the world, and exit quickly from the global crisis, it will be that grab the economic prosperity. Japan originally, the most freedom, should be in a good position. Before the goal eye, It's a chance, it does not escape absolutely! !