in_the_media

March 26, 2010


(There is no link to this report.)

You might think that falling prices would be a good thing for consumers and in the short term. But when prices continue to tumble it can be very bad news for a country's economy. That's the position Japan finds itself in. Jeffrey Kingston of Temple University, Japan Campus, says the current trend is worrying. "Household income has declined by 20 percent in the last decade," Kingston said. "So the real problem is that consumers are holding onto their wallets and waiting for prices to decline. To lure them into the showroom, producers are cutting prices. This feeds the expectation that prices will continue to drop, which means that consumers are still waiting."