Price stability and Japanese monetary policy
For most of the time since 1995, the Japanese price level has declined. Since early 1999, short-term interest rates have mostly remained near zero. Also, starting in 2001, the excess reserves held by banks have risen dramatically. Many observers have concluded that central banks are powerless to end deflation when short-term interest rates are near zero. This paper argues that such a pessimistic conclusion is unwarranted.
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- Gauti B. Eggertsson & Michael Woodford, 2003. "Optimal Monetary Policy in a Liquidity Trap," NBER Working Papers 9968, National Bureau of Economic Research, Inc.
- Saito, Makoto & Shiratsuka, Shigenori, 2001. "Financial Crises As the Failure of Arbitrage: Implications for Monetary Policy," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 19(S1), pages 239-270, February.
- Okina, Kunio & Shiratsuka, Shigenori, 2004. "Policy commitment and expectation formation: Japan's experience under zero interest rates," The North American Journal of Economics and Finance, Elsevier, vol. 15(1), pages 75-100, March.