Source of Underestimation of the Monetary Policy Effect: Re-Examination of the Policy Effectiveness in Japan's 1990s (original) (raw)
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AN EMPIRICAL ANALYSIS OF QUANTITATIVE EASING AND ITS ROLE FOR THE JAPANESE ECONOMY
Quantitative Easing (QE) has not been successful in maintaining a stable inflation rate for Japan. Moreover, it is found that Bank of Japan (BOJ) does not follow a fixed monetary policy rule such as the Taylor Rule. This is due to the fact that this approach violates principle conditions of the theoretical model. Clearly, the central bank follows a more flexible policy that adheres to their own economic structure. JEL Classification: E58; E42
Zombies on the Brink: Evidence from Japan on the Reversal of Monetary Policy Effectiveness
SSRN Electronic Journal, 2021
BIS Working Papers are written by members of the Monetary and Economic Department of the Bank for International Settlements, and from time to time by other economists, and are published by the Bank. The papers are on subjects of topical interest and are technical in character. The views expressed in them are those of their authors and not necessarily the views of the BIS. This publication is available on the BIS website (www.bis.org).
Journal of the Japanese and International Economies, 2008
Inoue, Tomoo, and Okimoto, Tatsuyoshi-Were there structural breaks in the effects of Japanese monetary policy? Re-evaluating policy effects of the lost decade This paper employs block recursive structural VAR models with Markov switching for modeling monetary policy and private sector behavior of the Japanese economy. By estimating the endogenous structural breaks, we investigate the existence, number, and nature of breaks possibly implied by the monetary policy adopted between 1975 and 2002. Results indicate that the Japanese economic system is best described by a non-absorbing two-state model, with major break happened around 1996. We also confirm that the interest rate monetary policy was effective before 1996, while monetary base shocks are identified as monetary policy shocks only after 1996.