IMF Working Papers

Bank of Japan's Quantitative and Credit Easing: Are they Now More Effective

ByUgo Fasano-Filho, Qing Wang, Pelin Berkmen

January 1, 2012

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Ugo Fasano-Filho, Qing Wang, and Pelin Berkmen. "Bank of Japan's Quantitative and Credit Easing: Are they Now More Effective", IMF Working Papers 2012, 002 (2012), accessed 12/5/2025, https://doi.org/10.5089/9781475502473.001

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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.

Subject: Balance of payments, Current account balance, Exchange rates, Foreign exchange, Inflation, Monetary policy, Nominal effective exchange rate, Prices, Unconventional monetary policies

Keywords: action of the BoJ, BoJ's assets, BoJ's balance sheet, BoJ's holding, BoJ's monetary policy action, BoJ's monetary policy measure, BoJ's policy action, conomic Activity, core inflation, current account, Current account balance, Exchange rates, Global, government bond holding, Inflation, Monetary Policy, monetary policy action, Nominal effective exchange rate, quantitative easing, transmission mechanism, Unconventional monetary policies, WP

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