[cjmb]

This is actually a picture of national failure, tantamount to celebrating a blowout losing scoreboard. It is not a model for others to copy.

Productivity and inflation are very related to each other. Per your chart, "Japan enters the chat" in the mid 1980s. If you're curious what has happened to Japan since the mid 1980s you can read https://en.wikipedia.org/wiki/Lost_Decades (this wikipage was pluralized from "Decade" to "Decades" in the last couple of years, due to the continued struggles of the Japanese economy).

To the extent that you hold central banks responsible for the national-economic state of things, Japan's central bank ought to be considered a massive failure.

If you lean towards the Krugman side of things, you can find his explanation of that failure here: https://web.archive.org/web/20161203180303/https://krugman.b...

If you prefer the Scott Sumner side, you can find his explanation of that failure here: https://www.themoneyillusion.com/why-japans-qe-didnt-work/ https://www.themoneyillusion.com/the-other-money-illusion/ https://www.themoneyillusion.com/rooseveltian-resolve/

Personally, I tend to sympathize with central banks and take a more muted view of their powers at the national-economic level. In my model, Japan's central bank was/is powerless given the magnitude of non-financial headwinds the country face(d) after the opening of China and beneath 2 decades of aggressive anti-Japanese trade policy from their largest trading partner (USA). This is a (slightly) heterodox take, and you can read my articulation of this view here: https://www.conradbastable.com/essays/unequal-growth-the-zer...

But whatever your take, Japan's economic struggles should not be mistaken for signals of success.

[throw0101a]

> This is actually a picture of national failure, tantamount to celebrating a blowout losing scoreboard. It is not a model for others to copy.

It's "losing" because Japan wants inflation. They've had the opposite problem the rest of the planet has. Inflation (generally) means there's some kind of economic activity.

I'm well aware of Krugman's thoughts on Japan. See his 1998 paper:

* https://www.brookings.edu/bpea-articles/its-baaack-japans-sl...

My post is a counter-point that somehow a global economy (always) means that central banks can't do anything. Just compare the US and the EU in the 2010s, and you'll see different trajectories.

[imtringued]

Central banks are just actors dressed up in fancy credentials. They are ultimately meaningless institutions. Yes they control the interest rate and they can do QE but the commercial banks and federal government wield at least ten times more power in economics alone.