Yukio Noguchi, professor, Aoyama Gakuin University. Toyo Keizai, May 26, 2001.
Many experts now believe that halting deflation is the top policy priority.
Thus prices will stay low even when more money is pumped into the economy. The easy money policy, in fact, could drive the yen lower and prevent consumers from enjoying the full benefits of lower prices. Companies that hope to survive in the years to come, in short, must have a pricing policy consistent with global trends. There is a need to fundamentally overhaul the old industrial structure, but measures to fight deflation will simply prolong the life of this structure. Even though Prime Minister Jun'ichiro Koizumi has stated his intention to carry through structural reform, there is increasing pressure to stop deflation, which will mean maintaining the status quo.