India's vulnerability towards the “Japanization” of the economy
Weak economic activities are vicious and contagious, long exposure of it to the subject drains the overall immunity (savings in terms of economics) of the subject (that we call “capita” in Latin and “person” in English). A lot of speculation and predictions are being made since subprime fall and repercussive things happened thereafter. A very unique word that has been used by economist to describe the situation is 'Japanization', although I don’t find it appropriate to tag the name of a nation or entire culture for such a negative connotation, however, this what the academics are using so far. Takatoshi Ito defined the term “Japanization” as a combination of the following economic conditions: (1) the actual growth rate is lower than the potential growth rate for an extended period; (2) the natural real interest rate is below zero and also below the actual real interest rate; (3) the nominal (policy) interest rate is zero; (4) deflation, i.e., negative inflation rate. ...