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Comment by s_Hogg | Hacker News Reader

It definitely can, but it's not guaranteed. Japan has been effectively printing money for ages, but it hasn't really led to inflation because demand is so weak - nothing gets bid up.

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Well that's easy, you just build bullet trains everywhere, and create a culture where people build new houses, rather than buy second hand [1]. That should get things moving...

Snark aside, are there any good sources looking at Japanese economics, because they don't seem to follow the same rules as everyone else.

[1] https://www.theguardian.com/cities/2017/nov/16/japan-reusabl...

I would recommend looking at it from a Modern Monetary Theory perspective (1) (2). In my case, it's only then, when everything started to make sense.

(1) - http://bilbo.economicoutlook.net/blog/?p=33094 (2) - http://bilbo.economicoutlook.net/blog/?p=40250

They (Japan) themselves are doing it: https://www.bloomberg.com/news/articles/2019-06-05/japan-wor...

Given that even the proponents of MMT don't agree on what it is, I wouldn't. Economics as a discipline has problems(1), but I don't think MMT goes anywhere near to addressing them, nor to providing a scientific basis for doing so.

(1) Source: I hold a bachelor and master degree in econ

>>"Given that even the proponents of MMT don't agree on what it is [..]"

I'm not an economist but I have read a lot of the MMT literature, including the available textbook (1) and it's a totally coherent framework.

Can you point me to some of those contradictions that you have observed?

(1) - https://www.amazon.com/Macroeconomics-William-Mitchell/dp/11...

>Well that's easy, you just build bullet trains everywhere, and create a culture where people build new houses, rather than buy second hand [1]. That should get things moving...

Yeah, so?

They should just throw money out of helicopters. That ought to do it. Dunno why nobody has tried doing that yet.

Protestant work ethic.

Giving the average working person money without making them "earn" it is seen as far more offensive to the order of society than, say, burning down the Amazon.

Just to give an entirely hypothetical example. </s>

Because that is the responsibility of the parliament. The problem with that is that the parliament will become addicted to the infinite monry spigot since the parliament isn't bound by the inflation target. If the central banks were authorized to hand out a pseudo UBI but only to hit inflation goals then helicoper money might work. It's basically some stupid political game.

Australia avoided recession in 2008-09 by doing almost precisely this. Everyone got A$900 or thereabouts (a month's rent or more for some). Worked fantastically.

Think of it as applying a defibrilator to all parts of the body at once because there's no central point you can target. Infrastructure projects aren't as good as this because they take time and only really effect one particular geographic region with some spillover if you're lucky.

Defibrillators literally kill people after which you can manually revive them because their ventricular fibrillation is stopped. Maybe the metaphor is still fitting but I'm not sure you were going for it...

Langauge is metaphor.

A vfib patient is already dead, or on their way there. The heart has lost all rhythm, isn't effectively circulating blood (though it's expending energy like mad), and in a few minutes, further classifications of clinical death (brain death, organ death, cell death) will inevitably follow.

What a defibrillator does is stop an invariably fatal loss or order, and allow the heart's normal rhythm to be reasserted. That may happen spontaneously or via further artificial stimulation.

Vfib itself is described as "an electrical disorder of the heart", which is what distinguishes itself from other forms of cardiac insult, most especially a coronary infarction, which is a physical blockage of blood supply, generally from accumulated plaque, blood clots, or both.

The analogoue to financial systems is at best imprecise, but what a financial stimulus shock such as the apocryphal "helicoptor drops" does is to provide free cash (spending credits) to a large fraction of the population in a case where spending has dried up. The idea being that the availability of money will get economic activity flowing again. In a case where normal activity has stopped, it's at least a fair analogy -- a one-time widespread cash shock which may start flows moving again.

The key point being that complex interactive systems operate on an ordered dynamic state. The heart needs to contract and relax, with a regular rhythm. The economy needs payments, receipts, and wages, exchanged on a regular basis. Stopping, blocking, or disrupting the regular flows is what's fatal.

Defibrillation isn't killing the patient. It's restoring regularity.

Didn't the US do this - approx $600/person - in ... 2008? And... similar in 2001?

https://www.thebalance.com/bush-economic-stimulus-package-33...

Didn't seem to stave off a recession here...

> Japan has been effectively printing money for ages, but it hasn't really led to inflation because demand is so weak

So where does this extra money go?

In large part, overseas. Japan has long been known for what's called "the carry trade". This is where you borrow money at whatever ridiculously low rate is available in your jurisdiction (e.g. Japan) and then "carry" it to somewhere that has a higher interest rate and invest it there. You then pocket the difference (or spread). I hasten to add that this is due to low interest rates rather than inflation, but guess how we wound up with low rates. The deflation Japan has been suffering from directly arises from the expectation that prices will be lower tomorrow compared to today. So why spend? Invest it somewhere instead.

This carry trade stuff has really screwed with a number of exchange rates relative to the Yen and has been going on for a long time.

So why is Japan perceived as expensive by most other countries? You'd think this activity would cheapen the yen

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