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Comments on "Price Stability and Japanese Monetary Policy."

Author

Listed:
  • Fujiki, Hiroshi

    (Institute for Monetary and Econ Studies, Bank of Japan)

  • Okina, Kunio

    (Institute for Monetary and Econ Studies, Bank of Japan)

  • Shiratsuka, Shigenori

    (Institute for Monetary and Econ Studies, Bank of Japan)

Abstract

This commentary summarizes the authors' main points of agreement and disagreement with respect to the proposal written by Dr. Hetzel. The authors agree with Dr. Hetzel's proposal on four points: after a central bank has lowered the interest rate to zero, (1) a central bank is not in fact powerless to stop deflation; (2) it does not make sense to focus on the quantity of the monetary base per se; (3) it is important to influence market expectations if monetary policy is to be effective; and (4) central bank solvency holds some importance. The authors disagree with Dr. Hetzel's proposal on three points: (1) transmission channels of quantitative easing; (2) potential costs and benefits of his proposal; and (3) the timing of introduction of an explicit nominal anchor.

Suggested Citation

  • Fujiki, Hiroshi & Okina, Kunio & Shiratsuka, Shigenori, 2004. "Comments on "Price Stability and Japanese Monetary Policy."," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 22(3), pages 25-36, October.
  • Handle: RePEc:ime:imemes:v:22:y:2004:i:3:p:25-36
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    File URL: http://www.imes.boj.or.jp/research/papers/english/me22-3-2.pdf
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    Cited by:

    1. Hiroshi Ugai, 2007. "Effects of the Quantitative Easing Policy: A Survey of Empirical Analyses," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 25(1), pages 1-48, March.
    2. Kuttner, Kenneth-N, 2004. "Comments on "Price Stability and Japanese Monetary Policy."," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 22(3), pages 37-46, October.

    More about this item

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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