Japan has been trying to create inflation for decades by monetary expansion, monetizing their debt, zero interest rates, all the tricks. It has mostly failed. It is _not_ the easiest way to cause significant inflation.
>It is _not_ the easiest way to cause significant inflation.
Or maybe they're not solely interested in causing inflation, and are concerned about other effects as well? eg. preventing hyperinflation. If all you wanted to do is cause inflation, you can do so very easily with helicopter money.
Yeah, helicopter money is pretty much the easiest way.
However, Japan makes me wonder why it is a problem in the first place. I mean, why does a problem need helicopter money as the solution? Why is no other method capable?
Consider this, if you increase the money supply and inflation doesn't happen, then there must be a deflationary force that is equal to the newly created inflation caused by increasing the money supply. This could be enough explain the ineffectiveness of low interest rates (debt must be paid back and therefore no inflation happens) but it is not enough to explain why QE didn't work because the Fed can sit on financial assets forever, if necessary.
Difficult to say as they are not 'actually' printing money tho they call it that, they are just creating bank reserves and since they are not used as money they don't generate inflation, not as measured by the cpi anyways.
