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Japan’s reflation policy was born in the midst of the December 2012 parliament election when LDP President Shinzo Abe, as part of his campaign platform, vowed to revitalize the economy. His reflation rhetoric is citied as being the lynchpin in Abe’s landslide victory.

While breaking free from a sluggish economy may sound great in theory, reflation is one of the worst possible policies you could come up. Why? Because it causes the value of government bonds to fall drastically. When the bonds drop you run the risk of entering a major financial crisis as banks nationwide that hold major shares of these bonds begin to fail. And as seen in many other financial crises, when banks fail the national economy itself runs the risk of crashing.

But why?

It’s not that reflation could leave us with cripplingly unstoppable inflation. What makes it so dangerous, is the fact that the government is artificially trying to create inflation in an economic environment in which it simply isn’t possible. By trying to make inflation happen under impossible conditions you only end up warping the economy itself, putting Japan at risk of complete and total economic meltdown.

In this book, up-and-coming economic analyst and Keio University Business School associate professor Seki Obata explains everything you need to know about Prime Minister Abe’s reflation policy; from exactly what the LDP has planned, to how it will effect Japan as well as the erroneous line of reasoning reflation was coined under. Thoroughly explaining the dangers of reflation from a variety of angles, Obata brings to readers a logical and startling new case study on 21st century economics in Japan.


Chapter 0. What is “Reflation?”

Chapter 1. What Exactly Will Reflation do to Japan’s Economy?

Chapter 2. How Will Reflation Weaken the Value of the Yen?

Chapter 3. Cheap Yen = Destruction of the Japanese Economy? How Exactly are the Market and Economy Linked?

Chapter 4. What Pro-Reflationists Don’t Unverstand: Inflation Isn’t a Good Thing

Chapter 5. The Pro-Reflationists Are Mistaken Again: You Can’t Make Inflation Happen

Chapter 6. So Why Exactly are Politicians Pushing Reflation?

Chapter 7. Pro-Reflationers Logical Errors

Chapter 8. Tactics to Weaken the Yen are a Thing of the Past 

About the Author


Obata is an associate professor at the Keio University Business School, member of the Government Pension Investment Fund application committee, blogger and columnist for the Toyo Keizai Online Paper. Earning his master’s from Harvard University, Obata worked for the Ministry of Finance and IMF before becoming an associate professor at Keio. He has written two books, Subete no Keizai wa Bubble ni Tojiru (Kobunsha) and Net-kabu no Shinri-Gaku (Mainichi Communications). 

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