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2003, No. 22
Posted 2003-09-02

Japanese Deflation Loses Something in the Translation

by James Bullard and John Seiffertt

Japan has experienced slow rates of money growth in the past five years, but the United States has not. As evident from the chart shown, the relatively high rate of money growth in the United States has been associated with a positive rate of inflation, while the relatively low rate of money growth in Japan has been associated with deflation.