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William Pesek

Japan's Peter Pan Problem

QE won't fly unless the public thinks it will.
The power of make believe.

The power of make believe.

Photographer: NBC via Getty Images

There are plenty of people in Asia who believe Haruhiko Kuroda, governor of the Bank of Japan, lives in Neverland. At the very least, economists on both sides of Japan's deflation debate -- those who worry Kuroda has weakened the yen too much, and those who believe he hasn't done enough -- think his policies have been out of touch.

But it was still surprising to hear Kuroda admit on Wednesday that his policies are guided by imagination -- specifically, the Japanese public's willingness to imagine they're working. "I trust that many of you are familiar with the story of Peter Pan, in which it says, 'the moment you doubt whether you can fly, you cease forever to be able to do it,'" he said  at a BOJ-hosted conference.