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When an economy gets caught into such a downward spiral, it is not easy to get out of this muddle of deflationary trap. Japan will know it better. It is three decades since Japanese economy got into this deflationary entanglement. They are yet to find a way out. If right policy tools are not used, China may be staring at a similar fate. ....
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Japan s economy experienced this back in the 1990s earlier, i spoke to professor eswar prasad, the former chief at the international monetary fund s china division, and he explained what s behind the slowing economy. the consumer demand has been very weak, and when consumer prices have been flat, it s likely to show that we are in deflationary territory. no producer prices, the prices producers pay for imports of raw materials and intermediate goods, have already been falling and squeezing industrial profits. if we are not in deflationary territory, we are very close and i think we are very close and i think we will see an official confirmation closely. and other asian economy confirmation closely. and other asian economy that confirmation closely. and other asian economy that suffered i asian economy that suffered from falling prices japan. some say china could be an a similar situation injapan was in back in the 1990s, some people calling it a balance balance sheet recession. do ....