Japan's Monetary Policy Transition, 1955-2004

Naoyuki Yoshino (yoshino.a7@keio.jp) and James Rhodes (rhodes@grips.ac.jp)

No 725, Econometric Society 2004 Far Eastern Meetings from Econometric Society

Abstract: This paper surveys the postwar evolution of Bank of Japan (BOJ) monetary policy. Using both qualitative and quantitative data, we describe the changes in the money supply process in response to changing institutional constraints. We focus on the transition from quantitative to qualitative control mechanisms, illuminating, in particular, the important role of the BOJ=s lending guidance (Awindow guidance@) in the early periods and financial liberalization in subsequent periods. Monetary policy reaction functions are estimated and used to identify major changes in policy instruments, targets, and indicators. We analyze the historical behavior of the money multipliers and their components, highlighting reasons for their current depressed state. We conclude with comments on current challenges facing the monetary authorities.

Keywords: Monetary policy; Bank of Japan (search for similar items in EconPapers)
JEL-codes: E51 E52 E58 (search for similar items in EconPapers)
Date: 2004-08-11
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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http://repec.org/esFEAM04/up.30042.1080738722.pdf (application/pdf)

Related works:
Working Paper: Japan's monetary policy transition, 1955-2004 (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:ecm:feam04:725

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