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How Can the Public Monitor Monetary Policy?

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  • Takashi Senda

Abstract

On August 11, 2000, the Bank of Japan made one of the most controversial decisions in the history of monetary policy when it ended its zero-interest-rate policy and increased the overnight rate to 0.25%. This paper aims to examine whether or not this decision to terminate the zero-interest-rate policy was premature. In this study, I argue that this decision by the Bank of Japan to tighten monetary policy in 2000 was unreasonable as there still remained a great deal of slack in the economy and inflation was not far from its target. On reading the minutes of the Monetary Policy Meeting of August 11, 2000, I observe that some arguments for tightening monetary policy seem to confuse rates of change and levels .

Suggested Citation

  • Takashi Senda, 2017. "How Can the Public Monitor Monetary Policy?," American Journal of Economics and Business Administration, Science Publications, vol. 9(2), pages 38-46, July.
    • Handle: RePEc:abk:jajeba:ajebasp.2017.38.46
    DOI: 10.3844/ajebasp.2017.38.46
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    References listed on IDEAS

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    1. Lars E. O. Svensson, 2011. "Practical Monetary Policy: Examples from Sweden and the United States," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 42(2 (Fall)), pages 289-352.
    2. Svensson, Lars E. O., 1997. "Inflation forecast targeting: Implementing and monitoring inflation targets," European Economic Review, Elsevier, vol. 41(6), pages 1111-1146, June.
    3. Lars E. O. Svensson, 2011. "Practical Monetary Policy: Examples from Sweden and the United States," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, pages 289-352.
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    More about this item

    Keywords

    Monetary Policy; Forecast Targeting; Inflation Targeting; Bank of Japan; JEL Codes: E52; E58;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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