Bank of Japan's Monetary Policy in the 1980s: a View Perceived from Archived and Other Materials

Masanao Itoh, Ryoji Koike and Masato Shizume
Additional contact information
Masanao Itoh: Professor, Otsuma Women's University and IMES, Bank of Japan (E-mail: masaitoh@otsuma.ac.jp)
Ryoji Koike: Director and Deputy Head of Monetary History Studies Group, IMES, Bank of Japan (E-mail: ryouji.koike@boj.or.jp)

No 15-E-12, IMES Discussion Paper Series from Institute for Monetary and Economic Studies, Bank of Japan

Abstract: This monographic paper summarizes views held by the Bank of Japan (hereafter BOJ or the Bank) in the 1980s regarding economic conditions and monetary policy formulation, perceived from the BOJ archives and other materials from the period. From a historical viewpoint, the authors see the 1980s as a watershed time for the Bank's policy formulation, because the Bank acquired lessons for monetary policy formulation under a large fluctuation in economic and financial conditions and innovated new approaches for monetary policy formulation and money market management as stated below. First, during the 1980s the BOJ had to largely consider the external imbalance in formulating policy, and attention began to shift towards price stability in the medium or long term by the end of the decade. Second, the large fluctuations in asset prices, money supply, and commercial bank lending were closely monitored during this period, but the Bank's assessment about their impacts on macroeconomic consequences in the medium to long term was insufficient. A reflection of these lessons appears to evolve into a perspective on the Bank's monetary policy formulation that financial imbalances should be examined as a risk for achieving price stability in the medium to long term. Third, in light of ongoing financial deregulation during this period, the Bank started to change monetary policy measures from those based on a regulated interest rate framework to those based on market operation with good use of money markets and flexible interest rates.

Keywords: Monetary policy management; Price stability in the medium and long term; Financial imbalance; External imbalance; Financial deregulation (search for similar items in EconPapers)
JEL-codes: E52 N15 (search for similar items in EconPapers)
Date: 2015-08
New Economics Papers: this item is included in nep-cba, nep-ger, nep-his, nep-mac and nep-mon
References: View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://www.imes.boj.or.jp/research/papers/english/15-E-12.pdf (application/pdf)

Related works:
Journal Article: Bank of Japan's Monetary Policy in the 1980s: A View Perceived from Archived and Other Materials (2015)
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:ime:imedps:15-e-12

Access Statistics for this paper

More papers in IMES Discussion Paper Series from Institute for Monetary and Economic Studies, Bank of Japan Contact information at EDIRC.
Bibliographic data for series maintained by Kinken ().