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Japanese Inflation, Does It Work? 2013-10-12 ¿ÀÈÄ 8:01:00

Last year, Abe Sinzo became the prime minister of Japan. Some of his public promises are about Japan's economic recovery.
In the 1990's, the Japanese economy was so bad that people called it "The Lost Decade". During this period, Japanese people felt ruin and despair. So, Abe encouraged domestic consumption. When people consume more products, companies make more goods and earn a lot of money. Then, they give money to their workers. The companies consume, too. To make people consume more, the government made the value of their currency lower. This is inflation. If the value of the currency is lowered but the price of goods stays the same, people continue to consume products.

But it isn't only good. Although the price of goods stays the same for a short time, the price eventually rises. Then customers' wallets close and the economy weakens again. When Japans' economy suffers, the global economy suffers also. Japan has a lot of debt to other countries. This is called the national debt. Japan has a lot of national debt to the USA, China, and some southeast Asian countries. When Japan had no money, they borrowed money from these countries. It's price became low and other countries went bankrupt.

How to fix the problem? The Japanese government can countrol inflation by about 0.5%. They can also give citizens coupons to buy goods. Japan has to cooperate with other countries to ease the economic crisis. When Japan and other countries cooperate, the can also improve their relationships. Japan should try to improve for the global economy and global peace.

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