Myths and Observations on Unconventional Monetary Policy: Takeaways from Post-Bubble Japan | Asian Development Bank

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Myths and Observations on Unconventional Monetary Policy: Takeaways from Post-Bubble Japan

Event | 25 January 2018 ADBI, Tokyo, Japan

Speaker: Nao Sudo
Affiliation: Bank of Japan
Time: 12:00–13:00

Background

Reservations are sometimes raised regarding the effectiveness of unconventional monetary policy (UMP) due to concerns about the influences of impaired financial systems and low policy rates. We empirically test if the effects of monetary policy shocks differ across the implementation period of UMP and conventional monetary policy (CMP), or across states of the economy, using Japan’s data from the 1980s to 2016. We find that effects of monetary policy have indeed differed across periods and states, and show that an unexpected 100 basis point cut in shadow rates during the UMP yielded larger expansionary effects on key economic variables than it did during the CMP.

About the Speaker

Nao Sudo is the deputy head of the Policy Studies Division of the Monetary Affairs Department of the Bank of Japan. He earned his MA in economics at Kyoto University in Kyoto, Japan, and his PhD in economics at Boston University in Boston, Massachusetts, US. He once served for working groups under the Basel Committee on Banking Supervision and Financial Stability Board.

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