Does excess liquidity pose a threat in Japan?
By: Gauti Eggertsson and Jonathan D. Ostry.
Contributors: Ostry, Jonathan David, 1962-; International Monetary Fund.
Series: IMF policy discussion paper ;; PDP/05/5; IMF policy discussion paper (Online) ;; PDP/05/5
Publisher: International Monetary Fund
Published: 2005
Place of publication: [Washington, D.C.]
Language: eng
Format: Electronic resource
Description: "This paper examines the effects of quantitative easing implemented by the Bank of Japan (BoJ) since early 2001, looking specifically at the impact on inflation expectations and real asset prices. It suggests a number of possible channels through which quantitative easing may have exerted influence, and reviews some of the empirical evidence linking open market operations and long-term bond purchases to real yields and other asset prices. It argues that quantitative easing has had smaller effects on nominal and real variables than desired, mainlybecause the BoJ has not succeeded in credibly communicating its policy intentions once the zero bound on short-term rates ceases to be binding. It argues that setting clear goals for inflation and a return to interest rate targeting are not only key elements of a successful strategy to avoid deflation, but are also essential to pin down expectations and avoid instability once deflation wanes."
Notes: Includes bibliographical references.
Title from PDF file (viewed on Apr. 28, 2005).
"April 2005."
"Research Department."
Also available in print.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.