- Rising oil prices put upwards pressure on inflation
- That also weighs on growth, creating a stagflationary trend
- How to deal with stagflation situation is a hard question for monetary policy
- In general, policymakers can deal with such a situation with a mix of fiscal and monetary policy
- But it is hard to control the economy with monetary policy alone
- BOJ was able to focus on easy policy to end deflation previously
- But now Japan is experience inflation so that may not be the case
More to come..
This article was written by Justin Low at investinglive.com.
