why can't japan print hell lot of money that people will just spend it?

i know that even though the government increases money supply, people will not spend it. but my doubt is, why can't the government print a lot of money that people will just spend it. imagine you are a japan's citizen, if you get money you will not spend it because of the situation. but if you get a lot of money you will at-least consider to spend a part of it.(don't think of printing so much money that it will cause hyperinflation)

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  • 8 years ago
    Favorite Answer

    Japan's in a liquidity trap. Even when the Bank of Japan takes steps to increase liquidity and make it available, people evidently don't borrow from banks. That's the transmission mechanism to get money into the hands of people, it goes through banks via lending. But Japan's aging and worried population doesn't want to risk getting into debt, and there is a distinct lack of entrepreneurialism and energy in the economy.

    Now Japan could drop cash from helicopters so it goes directly into peoples' hands and skips the banks. That's so radical no one has ever tried it (as far as I know), though some have suggested it. But even then, it's possible that the Japanese would only save the money and not spend it.

    Ultimately the problem ISN'T the money supply, as Japan has been "printing" money frequently in recent years to no avail. The problem is in the aging and shrinking population losing its confidence and vitality. You can print all the money you want, Japan is doomed because of demographics.

  • Philip
    Lv 6
    8 years ago

    The Bank of Japan has announced that it will do exactly that.

  • Anonymous
    8 years ago

    Watch your language. It is Yen,and hard currency.

  • Anonymous
    8 years ago

    you cannot just "print" money, it floods the market and devalues the currency.

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