Unconventional Monetary Policy: What Have We Learned and What Are The Unresolved Issues?

IIEA25th January 20172min
In her address at the IIEA, Dr Shirai provided a comprehensive analysis of the monetary policies pursued by the Bank of Japan since 2013.

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About the Speech:

In her address at the IIEA, Dr Shirai provided a comprehensive analysis of the monetary policies pursued by the Bank of Japan since 2013. She drew a distinction between what she sees as the three main phases of the BoJ’s unconventional monetary policies: a first phase when quantitative and qualitative easing (QQE) was introduced and expanded; a second phase when negative interest rates were introduced and the purchase of exchange traded funds (ETF) was increased; and a third phase, commencing in September 2016, when the BoJ introduced yield curve control on 10 year Japanese Government Bonds. Dr Shirai, who had previously supported the easing measures of Governor Haruhiko Kuroda, said she voted against the negative interest rate decision of January 2016 because it was inconsistent both logically and operationally. She argued that there was a contradiction between the BoJ’s negative interest rate policy and its Japanese Government Bond purchases, and noted that the decision led to concern among Japanese households about deposit rates and thus negatively impacted upon aggregate demand.

 

About the Speaker:

Dr Sayuri Shirai is a Professor at Keio University in Tokyo and a Visiting Scholar at the Asian Development Bank Institute. Dr Shirai was a Member of the Policy Board of the Bank of Japan from April 2011 to March 2016. She supported the Bank of Japan’s Quantitative and Qualitative Monetary Easing programme in 2013 and its subsequent expansion in 2014, however she voted against the negative interest rate policy introduced in January 2016. Prior to joining the Bank of Japan, she was a Professor of Economics at Keio University and she also taught at Sciences Po in Paris between 2007 and 2008. She is the author of numerous articles in professional journals and has published eleven books on topics including China’s exchange rate system, Japan’s macroeconomic policy and the European debt crisis. She is currently writing a book in English about the Bank of Japan’s monetary policy.