Part 2 : How Japan solved inflation in the 70s #Friedman #inflation #economics #japan #money
Happened in 1971 the quantity of money started to grow more rapidly as always happens inflation wasn’t affected for a time but by late 1972 it started to respond in early 73 the government reacted it started to cut monetary growth but inflation continued to soar for a Time
The delayed reaction made 1973 a very tough year of recession inflation tumbled only when the government demonstrated its deter mination to keep monetary growth in check it took 5 years to squeeze inflation out of the system Japan had attained relative stability unfortunately there’s no way to avoid the difficult Road the Japanese
Had to follow before they could have both low inflation and a healthy economy first they had to live through a recession until slow monetary growth had its delayed effect