The Great Inflation and Early Disinflation in Japan and Germany
Abstract
This paper considers the Great Inflation of the 1970s in Japan and Germany. From 1975 onward, these countries had low inflation relative to other large economies. Traditionally, this success is attributed to stronger discipline on the part of Japan and Germany’s monetary authorities—e.g., more willingness to accept temporary unemployment, or greater determination not to monetize government deficits. I instead attribute the success of these countries from the mid-1970s to their governments’ and monetary authorities’ acceptance that inflation is a monetary phenomenon. Likewise, their higher inflation in the first half of the 1970s is attributable to the fact that their policymakers over this period embraced nonmonetary theories of inflation.Download Info
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Article provided by International Journal of Central Banking in its journal International Journal of Central Banking.
Volume (Year): 3 (2007)
Issue (Month): 4 (December)
Pages: 23-76
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Keywords:Other versions of this item:
- Edward Nelson, 2007. "The great inflation and early disinflation in Japan and Germany," Working Papers 2006-052, Federal Reserve Bank of St. Louis.
- Nelson, Edward, 2007. "The Great Inflation and Early Disinflation in Japan and Germany," CEPR Discussion Papers 6156, C.E.P.R. Discussion Papers.
- 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
- E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
- E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Beyer, Andreas & Gaspar, Vítor & Gerberding, Christina & Issing, Otmar, 2009.
"Opting out of the great inflation: German monetary policy after the breakdown of Bretton Woods,"
Discussion Paper Series 1: Economic Studies
2009,12, Deutsche Bundesbank, Research Centre.
- Andreas Beyer & Vitor Gaspar & Christina Gerberding & Otmar Issing, 2008. "Opting Out of the Great Inflation: German Monetary Policy After the Break Down of Bretton Woods," NBER Working Papers 14596, National Bureau of Economic Research, Inc.
- Andreas Beyer & Vítor Gaspar & Christina Gerberding & Otmar Issing, 2009. "Opting out of the Great Inflation: German Monetary Policy after the Break Down of Bretton Woods," CFS Working Paper Series 2009/01, Center for Financial Studies.
- Andreas Beyer & Vitor Gaspar & Christina Gerberding & Otmar Issing, 2009. "Opting out of the Great Inflation: German monetary policy after the break down of Bretton Woods," Working Paper Series 1020, European Central Bank.
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