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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: Les H who wrote (175069)6/25/2002 10:37:13 AM
From: Les H   of 436258
 
Fed model on Japan post-bubble

A Fed econometric simulation of the global economy shows that had the Bank of Japan cut short-term interest rates by "a further 200 basis points at any time between 1991 and early 1995, deflation could have been avoided," the study says. The window of opportunity, however, closed in the second quarter of 1995. By then, the study says, "inflation had already fallen below zero." The Japanese government also cut taxes and increased government spending - but not in a way that might have ensured an economic recovery.

sg.biz.yahoo.com

hence, the Fed-BoJ deal in early 95 to inflate the dollar and try to help Japan export their way out of recession.
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