Bank of Japan’s Quantitative and Credit Easing: Are They Now More Effective?

Author/Editor: Berkmen, Pelin
Publication Date: January 01, 2012
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: This paper asks whether the BoJ’s recent experience with unconventional monetary easing has been effective in supporting economic activity and inflation. Using a structural VAR model, the paper finds some evidence that BoJ’s monetary policy measures during 1998-2010 have had an impact on economic activity but less so on inflation. These results are stronger than those in earlier studies looking at the quantitative easing period up to 2006 and may reflect more effective credit channel as a result of improvements in the banking and corporate sectors. Nevertheless, the relative contribution of monetary policy measures to the variation in output and inflation is rather small.
Series: Working Paper No. 12/2
Subject(s): Central banks | Credit | Current account balances | Deflation | Japan | Monetary policy

Author's Keyword(s): Monetary Policy | Economic Activity | Inflation
Publication Date: January 01, 2012
Format: Paper
Stock No: WPIEA2012002 Pages: 15
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