Amid the situation of prices not increasing, the holding of cash or deposits became a better investment, and thus firms and households hoarded cash and did not make other productive investments. Persistent deflation encouraged behavior to stay status quo, and this deprived Japan’s economy of vitality.
Glenn Stevens: Recent economic and financial developments in Australia Opening statement by Mr Glenn Stevens, Governor of the Reserve Bank of Australia, to the House of Representatives Standing Committee on Economics, Melbourne, 8 September 2008. *  *  *  Mr Chairman, thank you for the opportunity to meet again with the House Economics Committee.