A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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Nov 06 2014

Kuroda: Shock and Awe Tactics

ECRI has just updated its Japan Future Inflation Gauge (JAFIG). The value of this forward-looking gauge lies in its ability to predict cyclical turns in Japanese inflation.

Amid mounting signs that current policy prescriptions are failing, Bank of Japan (BOJ) Governor Haruhiko Kuroda sent an early holiday cheer through global markets last week when he announced that more trillions would be pumped into Japan’s ailing economy. The Japanese economy continues to struggle to regain momentum after the April sales tax hike, and the deflationary mindset that has plagued Japan for almost two decades remains stubbornly present. Indeed, as anticipated by the earlier downswing in ECRI’s JAFIG, year-over-year (yoy) growth in CPI inflation slid further to a six-month low in September, with BOJ officials recently warning that inflation could fall even further to below one per cent.

In our latest update to the JAFIG, we provide insight into the outlook for Japanese inflation, and whether the threat of deflation is likely to persist in the months ahead.

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The Agony and the Ecstasy

ECRI November 5, 2014

The inexorable decline in the employee compensation share of national income is gutting middle class incomes. More