When strong downward pressure is added to the economy, an inflationary equilibrium might shift down toward a deflationary equilibrium. If actual figures for Japan, the United States, and Europe are plotted on the chart, one can see that Japan’s economy has been hovering around deflationary equilibrium (Chart 2).
Thank you for your attention. 5  European Commission (2005), “Working together for growth and jobs. A new start for the Lisbon Strategy”, Communication to the Spring European Council, February. BIS Review 20/2005  5  6  BIS Review 20/2005  BIS Review 20/2005  7  8  BIS Review 20/2005