Policy ideas and monetary policy

―The Bank of Japan’s delayed break with monetary orthodoxy―

March 17, 2016 6:30 PM (finished)

Gene Park

(Loyola Marymount University)

Date/Time March 17, 2016 6:30 PM
Location Room 549 5th floor, Akamon Sogo Kenkyuto Institute of Social Science, University of Tokyo  [map]
Abstract Central bank independence is an institution designed to help keep inflation in check, but since the global financial crisis many countries have experienced worryingly low inflation or deflation. Some central banks have taken aggressive unorthodox measures such as large scale quantitative easing, while others have taken a more cautious approach. What determines the extent to which central banks have tackled the problem of low inflation? Examining the case of Japan, this paper makes the case that the policy ideas of central bankers are critical to understanding nature of the monetary response to economic downturn and low inflation. This presentation elaborates the specific ideas behind central banker choices and how the relatively closed monetary policy network that facilitated the circulation of these ideas. The presentation then presents a statistical test of this argument by employing an autoregressive model to analyze how policy ideas, as reflected in the minutes of BOJ deliberations, have impacted monetary policy.
Bio Dr. Gene Park is an Associate Professor of Political Science at Loyola Marymount University (LMU) and currently a visiting Associate Professor in the Faculty of Economics at Keio University. Prior to arriving at LMU, he taught at Baruch College, City University of New York. Professor Park was also a Shorenstein Fellow at Stanford University’s Asia Pacific Research Center. In addition, he spent two years as a researcher at Japan’s Ministry of Finance.