Financial Times FT.com

Interest rates rise would boost Japan's economy

By Diana Choyleva, Charles Dumas, Brian Reading and Gabriel Stein

Published: April 12 2007 03:00 | Last updated: April 12 2007 03:00

From Mr Charles Dumas, Mr Brian Reading, Ms Diana Choyleva and Gabriel Stein.

Sir, You are wrong to argue "The case against rate rises in Japan" (editorial, April 9) in the belief that higher interest rates would be deflationary. Raising rates transfers income from debtors to creditors. It is only deflationary if debtors cut spending by more than creditors increase theirs.

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