9/29/09

CPI components in Japan: Medical care and education

As we discussed many times in this blog, Japan has an eternal problem with deflation. The headline CPI and its components are on a long-term decline. It will continue another 40 years because the level of labor force in Japan has been and will be decreasing in line with the ageing and overall depopulation. Today, Japan Statistics released an estimate of the consumer price index for August 2009 - http://www.stat.go.jp/english/data/cpi/1581.htm.



It is instructive, that the only two components (from ten), which did not suffer annual decrease, are the medical care and education. This is in agreement with the extraordinary high rate of growth in both these components in the USA .
Despite the surging prices for medcare and education, the US is awaiting the fate of Japan - a longer deflationary period since 2012.

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