Japan... to 2017...

To increase domestic demand and external demand, it is important that Japan try to increase real wages and increase real exchange rate by lowering prices and price expectations, respectively, in the short-run... It would also increase long-run price expectations because demand and spending may go up due to lower prices and lower prices would also restrict some supply... External devaluation or nominal depreciation too increases income relative to prices, but it cuts real wages by increasing inflation which lowers domestic demand, but increases exports or external demand by increasing depreciation... Higher money-supply and full-employment increase inflation and inflation expectations, people demand more money which is responsible for higher nominal wages, nominal interest rate and nominal exchange rate which might increase competitiveness by cutting down on real wages, real interest rate and real exchange rate by inflation to increase supply, but this reduces demand and savings (and investment 'cause of higher real rates) or increase supply relative to demand which is responsible for lower price and price expectations... To increase demand it is important that the policy makers try to increase real wages, real interest rate and real exchange rate... It is good to increase demand, domestic and external upto full employment, after which increase in money-supply would increase prices and wages and the economy would lose competitiveness and demand... Lower cost and prices also increase demand and growth…