Government bonds have remained stable so far. But if that confidence is lost, bonds could lose their perceived safety and that would endanger the country’s ability to borrow, Kanno warned.
Setting an inflation target is a tricky idea, Kanno said. If a C student has been failing at trying to get a B, is targeting an A going to make a difference?
And the idea that people will go shopping, expecting prices to go up later, is just ridiculous, he said. People will jump to start consuming — only when they see prices shooting up.
‘‘It takes a long time to get out of deflation,’’ Kanno said. ‘‘One needs to proceed with caution.’’
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