After its economic bubble burst in the early 1990s, Japan endured more than three “lost” decades in a prolonged struggle against deflation — an invisible monster.
The true horror of deflation can only be properly understood by those who have experienced it first hand. For more than a decade, I served as a member of the Council on Economic and Fiscal Policy under three prime ministers, playing a role in guiding the Japanese economy. Six of those years were during the period in which “Abenomics” was implemented.
Today, Japan at last stands on the brink of an exit from those years. The war in Ukraine, intensifying tension between the US and China, and significant rises in the cost of imports have begun to move previously frozen domestic prices, triggering the highest wage increases in more than 30 years.