IDEAS home Printed from
   My bibliography  Save this paper

La Politica Monetaria En Japon: Lecciones A Extraer En La Comparacion Con La De Los Eeuu


  • Alicia García Herrero

    (Banco de España)

  • César Martín Machuca

    (Banco de España)


Japan’s experience shows that very negative circumstances are required for a country to suffer from protracted deflation. The comparison of Japan’s developments in the last few years with those of the US points to large differences, which suggest that the risk of deflation in the US is low. However, the analysis of the deflation spiral in Japan could be useful to draw lessons for other countries. The first lesson to draw is that deflation is very costly and that it is difficult to anticipate. Authorities should, thus, react aggressively to avoid zero interest rates, since reaching the zero bound drastically reduces the effectiveness of monetary policy. Before reaching the zero-bound, it seems useful to adopt an inflation targeting regime, perhaps accompanied by an explicit compromise of maintaining interest rates at very low levels for a predetermined period. When zero bound is reached, the authorities still have policy instruments to fight against deflation, among them heterodox monetary measures, expansionary fiscal policy and/or substantial exchange rate depreciation. The case of Japan points to the large potential costs of these options, in terms of the central bank’s balance sheet, the sustainability of the fiscal accounts and, potentially, the stability of the international monetary system. However, Japan’s protracted stagnation and deflation is bound to be more costly.

Suggested Citation

  • Alicia García Herrero & César Martín Machuca, 2003. "La Politica Monetaria En Japon: Lecciones A Extraer En La Comparacion Con La De Los Eeuu," Macroeconomics 0311005, EconWPA.
  • Handle: RePEc:wpa:wuwpma:0311005
    Note: Type of Document - pdf; prepared on WIN 2000; to print on HP;

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:

    More about this item


    Japón; EEUU; política monetaria; deflación;

    JEL classification:

    • E - Macroeconomics and Monetary Economics

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpma:0311005. 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: (EconWPA). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.