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Ideal and Real Japanese Monetary Policy: A Comparative Analysis of Actual and Optimal Policy Measures

Kiyotaka Nakashima ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper discusses the successes and failures of Japanese monetary policy by evaluating policies from January 1980 to May 2003 in the light of optimal policy rules. First, we quantitatively conceptualize the Bank of Japan (BOJ)'s policy decisions by employing Bernanke and Mihov's (1998) econometric methodology for developing monetary-policy measures, and term the resulting policy measure the `actual policy measure'. Next, assuming that the BOJ is committed to optimal policy rules, we simulate optimal policy paths, which we term `optimal policy measures'. We evaluate Japanese monetary policy historically by comparing actual and optimal policy measures.

Keywords: Japanese Monetary Policy; Structural VAR; Low-interest Rate Policy. (search for similar items in EconPapers)
JEL-codes: C32 E52 E58 (search for similar items in EconPapers)
Date: 2006-05-10
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Published in The Japanese Economic Review 3.59(2008): pp. 345-369

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Related works:
Journal Article: IDEAL AND REAL JAPANESE MONETARY POLICY: A COMPARATIVE ANALYSIS OF ACTUAL AND OPTIMAL POLICY MEASURES* (2008) Downloads
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