Advanced Search
MyIDEAS: Login to save this paper or follow this series

"The Role of Monetary Policy under Financial Turbulence: What role did the quantitative easing policy play in Japan?"(in Japanese)

Contents:

Author Info

  • Shin-ichi Fukuda

    (Faculty of Economics, University of Tokyo)

Abstract

Under the financial turbulence, the Bank of Japan (BOJ) had launched a series of unprecedented monetary policies in the late 1990s and the early 2000s. The policies were not effective under liquidity trap from a view point of classical macroeconomics. However, they were powerful in providing ample liquidity to the short-term money market. In the first part, we investigate what role the BOJ played as the lender of last resort and as the lender of so-called Lombard lending facility. The BOJ had played an important role as the lender of last resort until the early 2000s but it lost its role under the quantitative easing policy. In the second part, we explore how effective the unprecedented monetary policies were in stabilizing intra-daily call market. Even under the zero interest rate policy, some overnight loans were transacted at the interest rates that were significantly higher than 0%. In contrast, risk premiums almost disappeared in the short-term financial market under the quantitative easing policy. This was particularly true when the BOJ intensified its quantitative easing policy. We show that the extreme monetary policy was useful in improving macroeconomic performance such as average stock prices.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/2008/2008cj205.pdf
Download Restriction: no

Bibliographic Info

Paper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE J-Series with number CIRJE-J-205.

as in new window
Length: 34 pages
Date of creation: Oct 2008
Date of revision:
Handle: RePEc:tky:jseres:2008cj205

Contact details of provider:
Postal: Hongo 7-3-1, Bunkyo-ku, Tokyo 113-0033
Phone: +81-3-5841-5644
Fax: +81-3-5841-8294
Email:
Web page: http://www.cirje.e.u-tokyo.ac.jp/index.html
More information through EDIRC

Related research

Keywords:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:tky:jseres:2008cj205. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CIRJE administrative office).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.