Editing Pigou effect (section)

== The Pigou effect and Japan ==
If the Pigou effect always operated strongly, the [[Bank of Japan]]'s policy of near-zero nominal [[interest rate]]s might have been expected to end the [[History of Japan#The 'Lost Decade'|Japanese deflation]] of the 1990s sooner.

Other apparent evidence against the Pigou effect from Japan may be its long period of stagnating consumer expenditure whilst prices were falling. Pigou hypothesised that falling prices would make consumers feel richer (and increase spending) but Japanese consumers tended to report that they preferred to delay purchases, expecting that prices would fall further.