Monetary policy has lowered short-term interest rates to zero, and pushed an enormous quantity of cash into the system in an attempt to get some expansionary impetus to an economy where there has been no appetite for borrowing.
In this respect, the debate about macroeconomics in Japan has seen the return of a number of themes prominent in the 1930s, and it is proving much more difficult to get Japan’s growth moving and its prices back to small positive rates of increase than most people would have expected.