A Peek Inside the Black Box
AbstractThis paper uses vector autoregressions to examine the monetary transmission mechanism in Japan. The empirical results indicate that both monetary policy and banks’ balance sheets are important sources of shocks, that banks play a crucial role in transmitting monetary shocks to economic activity, that corporations and households have not been able to substitute borrowing from other sources for a shortfall in bank borrowing, and that business investment is especially sensitive to monetary shocks. We conclude that policy measures to strengthen banks are probably a prerequisite for restoring the effectiveness of the monetary transmission mechanism.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 99/137.
Date of creation: 01 Oct 1999
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- Massimo GIULIODORI, 2002.
"Monetary Policy Shocks and the Role of House Prices Across European Countries,"
164, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
- Massimo Giuliodori, 2004. "Monetary Policy Shocks and the Role of House Prices Across European Countries," DNB Working Papers 015, Netherlands Central Bank, Research Department.
- Wako Watanabe, 2004. "Prudential Regulation, the Credit Crunch" and the Ineffectiveness of Monetary Policy: Evidence from Japan," ISER Discussion Paper 0617, Institute of Social and Economic Research, Osaka University.
- Mark R. Stone & Charles Frederick Kramer, 2005. "A Post-Reflation Monetary Framework for Japan," IMF Working Papers 05/73, International Monetary Fund.
- Morana, Claudio, 2004. "The Japanese stagnation: an assessment of the productivity slowdown hypothesis," Japan and the World Economy, Elsevier, vol. 16(2), pages 193-211, April.
- Mark R. Stone, 2003. "Greater Monetary Policy Transparency for the G3," IMF Working Papers 03/218, International Monetary Fund.
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