Japan is the country with the longest history of implementing unconventional monetary policies, which were first introduced fifteen years ago and have since been expanded several times. A case in point is the quantitative and qualitative monetary easing (QQE) policy introduced by the Bank of Japan (BOJ) in early 2013 along with the commitment to continue with the program as long as necessary to achieve the BOJ’s 2 per cent price stability target. This study attempts to assess the overall macroeconomic effects of Japan’s unconventional monetary policies, with an emphasis on the recent QQE program. Using a stylised block-recursive vector autoregression framework, the analysis suggests that expansionary unconventional monetary policy shocks have clear macroeconomic effects, leading to a persistent rise in real output and inflation in Japan. The evidence also suggests that these macroeconomic effects became larger and more persistent after the introduction of QQE. A formal analysis that allows for a regime shift based on a smooth-transition vector autoregression model supports these findings.

Professor Ryuzo Miyao is a professor of Economics at the University of Tokyo. He obtained his PhD in Economics at Harvard University in 1994, and he is a former member of monetary policy board at the Bank of Japan. Please see more details from his profile here.

This seminar is co-organized by AJRC (The Australia-Japan Research Centre) and CAMA.

AJRC will provide light lunch for seminar participants, so please RSVP to Professor Tatsuyoshi Okimoto at tatsuyoshi.okimoto@anu.edu.au for catering purposes by Friday 17 March.