Prices continued to decline principally because a large shock brought by the financial crisis affected Japan’s economy and the output gap widened. Nowadays, there is no need to explain how a financial crisis damages the real economy through erosion of financial intermediation. However, at the time, this mechanism seems to have been grossly underestimated.
The fact that many of our firms are not listed, and are private or family partnerships does not remove the need for good governance. Every financial institution operating in Trinidad and Tobago will extol the virtues of good governance, even when their actual operations may indicate otherwise. It is time that good governance ceases to be the background noise and becomes the main music.