Spillover Effects of Japan’s Quantitative and Qualitative Easing on East Asian Economies

Shin-ichi Fukuda ()

No 631, ADBI Working Papers from Asian Development Bank Institute

Abstract: This paper explores the spillover effects of Japan’s quantitative and qualitative easing (QQE) on East Asian economies. Under the new monetary policy regime, the Japanese yen depreciated substantially, raising concerns that it would have a regional beggar-thy-neighbor effect. It is thus important to see what effects the QQE had on neighboring economies. Our empirical investigation of East Asian stock markets finds that they first reacted to the yen’s depreciation negatively, yet came to respond positively as the QQE progressed, implying that the QQE had a much smaller beggar-thy-neighbor effect than was originally feared. We show that the QQE benefited East Asian economies because the positive spillover effect of Japan’s stock market recovery dominated the beggar-thy-neighbor effect in the region.

Keywords: spillovers; quantitative and qualitative easing; qqe; beggar-thy-neighbor effect; East Asia; yen depreciation; stock market (search for similar items in EconPapers)
JEL-codes: E52 F10 F32 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2017-01-11
New Economics Papers: this item is included in nep-cba, nep-mac, nep-mon and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:adbiwp:0631

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