Does Inflation Enrich Life? The Path to Wage Growth Without Inflation

This is an important policy proposal by Research Fellow Wataru Takahashi of Kobe University's Research Institute for Economics and Business Administration, providing critical examination of the "virtuous cycle of prices and wages" argument that forms the core of current Japanese economic policy. This paper theoretically and empirically analyzes problems with economic policies dependent on inflation expectations and explores the feasibility of achieving wage growth without inflation. Current analysis shows that despite inflation causing hardship for citizens' lives in the form of "price increases," government and Bank of Japan policies continue to pursue inflation targets.