Inflation targeting and monetary policy in practice: the experience of the Bank of Japan

Sohei Kaihatsu, Kazuhiro Masaki, Yu Sugioka, Kosuke Takatomi and Hiroki Yamamoto

Chapter 24 in Research Handbook on Inflation, 2025, pp 519-532 from Edward Elgar Publishing

Abstract: This chapter examines the Bank of Japan's (BOJ) implementation of inflation targeting to achieve a 2 percent price stability target. It traces the historical development of Japan's inflation targeting framework from its origins around 2000, driven by deflationary pressures and the zero lower bound on interest rates, to its formal adoption in 2013. The chapter discusses the unique challenges Japan faced, such as maintaining policy flexibility and credibility, especially in light of the country's experience with an asset price bubble in the late 1980s. The evolution of unconventional monetary policy tools, including the zero interest rate policy, quantitative easing, and yield curve control, is also detailed. The chapter evaluates the effects of inflation targeting on Japan's macroeconomic conditions, highlighting the difficulties in achieving the 2 percent target consistently. It concludes by addressing current issues and the ongoing assessment of underlying inflation amid recent economic developments.

Keywords: Bank of Japan; Inflation targeting; Price stability; Monetary policy; Deflation (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035327751
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.elgaronline.com/doi/10.4337/9781035327768.00039 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:23092_25

Ordering information: This item can be ordered from
http://www.e-elgar.com

Access Statistics for this chapter

More chapters in Chapters from Edward Elgar Publishing
Bibliographic data for series maintained by Jack Sweeney ().