Deflation means a continuing decline in the over all prices of goods and services, which isn' t accompanied by economic recession and decline of money supply. At the beginning of 1990s, Japan began the more than 10 years-long economic recession. While in recent years deflation in the world causes Japanese economy falling into the vicious circle of deflation and economic recession. A feature of the deflation in Japan is that the continuous price decline. large fiscal deficits and super low interest rate mix up,which make Japanese government' s solving deflation more difficult. After 2003 a new feature of Japanese economy is that the parallel of deflation and economic growth. Japanese government must adjust its policy to realize the continuous increase of economy. Our country just walk out of the shadow of deflation, but the pressure still remains. So we may draw lessons from the development and solving of the deflation in Japan.
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