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| Japan's Monetary Policy |
"The Bank of Japan has followed a much tighter monetary policy over the past 15 years than widely recognised."
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"This explains a significant part of the Japanese economy’s underperformance. Zero interest rates suggest policy accommodation, but a simple Taylor Rule indicates that short-term interest rates deserved to go negative. Moreover, judged by measures of quantity liquidity, the BoJ spent most of the period tightening. Admittedly, institutional factors embedded in the Bank of Japan Law prevented it easing, while its normal bill discounting was disrupted by the shift into surplus of the corporate sector. The strong Yen has been the best barometer of this monetary deflation. Recent signs of deliberate Yen weakness and the revised Bank of Japan Law (2001) are omens for an end to deflation."
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Crossborder Capital-Michael Howell
30.05.2007
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Themes
Asia
Bonds
Bubbles and Crashes
Business Cycles
Central Banks
China
Commodities
Contrarian
Corporates
Creative Destruction
Credit Crunch
Currencies
Current Account
Deflation
Depression
Equity
Europe
Financial Crisis
Fiscal Policy
Germany
Gloom and Doom
Gold
Government Debt
Historical Patterns
Household Debt
Inflation
Interest Rates
Japan
Market Timing
Misperceptions
Monetary Policy
Oil
Panics
Permabears
PIIGS
Predictions
Productivity
Real Estate
Seasonality
Sovereign Bonds
Systemic Risk
Switzerland
Tail Risk
Technology
Tipping Point
Trade Balance
U.S.A.
Uncertainty
Valuations
Yield
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