Fight Deflation with Deflation, Not with Monetary Policy

Jonathan E. Leightner

13 citations0/0 files storedJapanese Economy

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Monetary Policy and Economic Impact Economic Theory and Policy Economic theories and models

Abstract

The Japanese government has pinned its hopes of defeating deflation on monetary policy. This article applies a new analytical technique, reiterative truncated projected least squares, (RTPLS) to monthly Japanese data from January 1970 to January 2003. In this application, RTPLS produces a separate estimate of dCPI/d(M2 + CD) and of dCPI/d(M2 + CD) for each observation, which makes it possible to see how they change over time due to the influence of omitted variables. I find that dCPI/d(M2 + CD) falls by 55 percent between October 1997 and January 2003, hampering the Bank of Japan's efforts to fight deflation. I recommend that Japan change its strategy. I recommend that Japan fight deflation with deflation just as firefighters often use smaller fires to burn a fire break in the path of out-of-control forest fires.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 13 citations exist upstream.

Cited by

2008Negative fiscal multipliers exceed positive multipliers during Japanese deflation 2010Fiscal stimulus for the USA in the current financial crisis: what does 1930–2008 tell us?

Imported from OpenAlex (CC0) — nothing here is generated.