Avoiding a Great Depression but Getting a Great Recession

MacLean, Brian K.
March 2006
International Journal of Political Economy;Spring2006, Vol. 35 Issue 1, p84
Academic Journal
The article presents an overview of the Bank of Japan's monetary policy during Japan's Great Recession from 1991-2004. The Bank of Japan was faced with a decline in asset price, slowdown in economic growth, deflation, fiscal policy that transformed budget surpluses to high gross debt, unstable exchange rates, structural reforms and problems in the banking industry. The Bank of Japan first responded by using conventional fiscal policy to change monetary policy rates incrimentally. It then used borderline innovative measures like a near-zero percent interest rate policy. Finally it changed its policy to push inflation down to zero and increase the government's coffers.


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