Search Results
Speech
Lessons at the zero bound: the Japanese and U.S. experience
Remarks at the Japan Society, New York City.
Conference Paper
Summary panel: Japan's experience with zero interest rates
The current policy stance of the BOJ has an automatic stabilizer element in it despite the fact that we have hit the zero rate bound. That is to say, the promise to "keep the zero rate until deflationary concerns are over" puts downward pressure on long-term interest rates when people see negative signs about the economy because they expect the zero rate to stay for a longer period of time. A similar thing will happen anyway. But the current commitment seems to have strengthened the effect.
Working Paper
Monetary \"targeting\" in Japan and the U.S.: which is more accurate?
This paper examines the issue of whether differences in money targeting or base-drift procedures between Japan and the U.S. are significant contributing factors to Japan's superior macroeconomic performance over the last decade, and concludes that these procedures probably are not important factors. ; We compare Bank of Japan (BoJ) money growth projections with Federal Reserve money targets. We show that BoJ projections are not comparable to annual money targets set by the Fed. We construct from past Records of Policy Actions of Federal Open Market Committee meetings a data set of Fed ...
Journal Article
Financial liberalization and monetary control in Japan
This article examines the effects of financial market reform on monetary control in Japan during the past two decades. The authors identify changes in the Bank of Japan's operating strategy and evaluate the Bank's ability to influence key policy variables in the current liberalized environment.
Working Paper
Monetary policy alternatives at the zero bound: an empirical assessment
The success over the years in reducing inflation and, consequently, the average level of nominal interest rates has increased the likelihood that the nominal policy interest rate may become constrained by the zero lower bound. When that happens, a central bank can no longer stimulate aggregate demand by further interest-rate reductions and must rely on "non-standard" policy alternatives. To assess the potential effectiveness of such policies, we analyze the behavior of selected asset prices over short periods surrounding central bank statements or other types of financial or economic news ...
Working Paper
Foreign exchange intervention when interest rates are zero: does the portfolio balance channel matter after all?
The Japanese zero-interest rate period provides a "natural experiment" for investigating the effectiveness and transmission channels of sterilized intervention when traditional monetary policy options are constrained. This paper takes advantage of the fact that all interventions in the JPY/USD market during the zero-interest rate period are sterilized sales of JPY and, therefore, none of these interventions can signal a future interest rate decrease. In order to further assess through which transmission channel these interventions work, the analysis integrates official daily Japanese ...
Working Paper
Preventing deflation: lessons from Japan's experience in the 1990s
This paper examines Japan's experience in the first half of the 1990s to shed some light on several issues that arise as inflation declines toward zero. Is it possible to recognize when an economy is moving into a phase of sustained deflation? How quickly should monetary policy respond to sharp declines in inflation? Are there factors that inhibit the monetary transmission mechanism as interest rates approach zero? What is the role for fiscal policy in warding off a deflationary episode? We conclude that Japan's sustained deflationary slump was very much unanticipated by Japanese policymakers ...