Monetary Policy and the Lost Decade: Lessons from Japan
研究日本失落十年期间利率政策，发现央行反应函数符合近1%通胀目标，经济低迷主因是负面冲击而非政策失误；模拟显示单纯提高通胀目标效果有限，但价格水平目标或结合激进产出反应能改善稳定效果。
I investigate how monetary policy can avoid a deflationary slump when policy rates are near zero by studying interest rate policy during Japan's “Lost Decade.” Estimation results suggest that the Bank of Japan's interest rate policy fits a conventional reaction function with an inflation target near 1%. The disapointing economic performance thus seems primarily due to adverse economic shocks rather than extraordinary policy errors. Also, counterfactual policy simulations suggest that simply raising the inflation target would not have substantially improved performance. However, price‐level targeting or combining a higher inflation target with an aggressive output response would have achieved superior stabilization results.