Capital and Credibility of the Bank of Japan: A Perspective(in Japanese)

Atsushi Tanaka ()
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Atsushi Tanaka: School of Economics, Kwansei Gakuin University

No 97, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: The Bank of Japan has used some unconventional monetary easing measures for more than a decade, and it is often pointed out that it might damage the Bank’s capital and thus jeopardize its credibility. First, this paper reviews the past literature on the role of central bank capital and how a damaged balance sheet hurts credibility. Then, this paper examines the recent situation of the Bank of Japan by applying its financial statement data in 2005-2011 to the model of Ize (2005). The examination shows that the Bank was in an unfavorable situation, but not bad enough to jeopardize its credibility thanks to its moderate use of unconventional measures. Finally, this paper summarizes some studies that should be developed in the future.

Keywords: central bank; the Bank of Japan; capital; credibility; unconventional monetary policy (search for similar items in EconPapers)
JEL-codes: E5 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2012-12, Revised 2012-12
New Economics Papers: this item is included in nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:97

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