better understanding on deflation

1. What Do Deflation and Beef Bowl
Have in Common?
 experiencing deflation in Japan

2. Inflation vs deflation
• inflation:
a rise in the general level of
prices of goods and services
• deflation:
decline in the general price
level of goods and services

3. causes of deflation?
• decrease in money
supply
• increase in supply of
goods
• fall in demand for goods
•escalation in demand for
money
(decrease velocity of
money)

4. impacts of deflation
• businesses may shut down or reduce their
production
• unemployment may increase
• wage rates may fall
• may create pessimism
• economy could fall into a recession

5. Japan’s deflation
• hampered Japan from
the mid-1990s to at
least 2005
• after the collapse of its
bubble economy
• households held back
spending
• companies were unsure of how much to
invest
• unemployment remains near record highs
• wages are falling

6. Japan’s big three beef bowl restaurants
1. Sukiya
2. Yoshinoya
3. Matsuya

7. beef bowl price war
• cut their already low prices to keep customers

8. what do deflation and beef bowl have in
common?
• Beef bowl = falling prices
• Deflation = falling prices