Nobel-winning U.S. economist Paul Krugman has urged Japan to hold off on a consumption tax increase planned for April next year and hammer out new stimulus measures to overcome deflation.
"I would call for not hiking the consumption tax," Krugman said Tuesday after a meeting with Prime Minister Shinzo Abe and other top government officials. "Definitely there should be an additional push, not simply holding off on the consumption tax but some actual deliberate stimulus."
Given the current global economic weakness, he told reporters that Japan had not emerged from deflation and fiscal policy should be used to reinforce monetary easing after the world's third-largest economy has depended too much on accommodative monetary policy.