There's a bit of truth there, not that my opinion means much, but Japan's biggest issue is that they haven't invested enough in the people, and by extension supporting domestic growth/consumption.
And when I say Japan here, that's Japan, the government, and more importantly what is called "Japan, Inc." Corporate Japan has amassed an absolutely staggering amount of money over the past 10/20 years, they haven't done enough with it, and Abenomics (though I think they honestly know it's an issue, and have tried to address it) hasn't managed to crack that nut.
Now, as to the second point concerning inflation, I maybe naively think that's easier to talk to. I think the first idea isn't that you want inflation, it's that you don't want deflation. Prices have to do something, and deflation tends be be very unfun, and has proven tricky to get along with. It's just that societies have found it easier to fight excessive inflation than any amount deflation, so you end up with 'price stability' being interpreted as 'inflation, but not that much'. Ideally imo you're running above 0 with some headroom.
I also think inflation is sort of is Darwinian-ly helpful (though it may be very uncomfortable/destructive) in that it kind of naturally gives a mechanism where everything is being constantly re-evaluated over time. In a world where everything gets more expensive over time, if you can't get more efficient, or maintain your pricing power, you're being compressed. And again, that's not very fun in the context of wage growth, it's people's lives and livelyhood. Debts also become nominally cheaper to service over time. A lot of stuff works out cleaner when you have inflation vs deflation, but there's still unfun aspects.
One thought experiment I have is a little about investment/consumption, and debt.
If you want to go buy something you need, and tomorrow the price will be higher (inflation ad infinitum), when is the best time to buy it? Now.
If you want to go buy something you need, and tomorrow the price will be lower (deflation ad infinitum), when is the best time to buy it? Never? How long do you wait?
And when I say Japan here, that's Japan, the government, and more importantly what is called "Japan, Inc." Corporate Japan has amassed an absolutely staggering amount of money over the past 10/20 years, they haven't done enough with it, and Abenomics (though I think they honestly know it's an issue, and have tried to address it) hasn't managed to crack that nut.
Now, as to the second point concerning inflation, I maybe naively think that's easier to talk to. I think the first idea isn't that you want inflation, it's that you don't want deflation. Prices have to do something, and deflation tends be be very unfun, and has proven tricky to get along with. It's just that societies have found it easier to fight excessive inflation than any amount deflation, so you end up with 'price stability' being interpreted as 'inflation, but not that much'. Ideally imo you're running above 0 with some headroom.
I also think inflation is sort of is Darwinian-ly helpful (though it may be very uncomfortable/destructive) in that it kind of naturally gives a mechanism where everything is being constantly re-evaluated over time. In a world where everything gets more expensive over time, if you can't get more efficient, or maintain your pricing power, you're being compressed. And again, that's not very fun in the context of wage growth, it's people's lives and livelyhood. Debts also become nominally cheaper to service over time. A lot of stuff works out cleaner when you have inflation vs deflation, but there's still unfun aspects.
One thought experiment I have is a little about investment/consumption, and debt. If you want to go buy something you need, and tomorrow the price will be higher (inflation ad infinitum), when is the best time to buy it? Now.
If you want to go buy something you need, and tomorrow the price will be lower (deflation ad infinitum), when is the best time to buy it? Never? How long do you wait?