Thursday, May 16, 2013

No, Japan Didn't Have 3.5% Growth

Japan officially reported that quarterly growth was nearly 0.9% (3.5% at an annualized rate) in the first quarter, something that will no doubt be taken as proof that "Abenomics" works.

However, this number presupposes that there was deflation of 0.5% , as nominal GDP only rose less than 0.4%. If we instead use the domestic demand deflator, which was unchanged, to calculate real growth, it was too less than 0.4%. That was less bad than in most European countries, but far from being a strong boom.


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