Monetary Policy with Very Low Inflation in the Pacific Rim
Monetary Policy with Very Low Inflation in the Pacific Rim
The editors of this volume attribute low inflation and deflation in the region to a number of recent phenomena. Some of these episodes, they argue, may be linked to rapid growth on the supply side of economies. Here, inadequate demand policy can produce what is referred to as a "liquidity trap" in which the expectation of falling prices encourages agents to defer costly purchases, thereby discouraging growth. Low inflation rates can also be traced to the presence of a "zero-lower bound" on interest rates, as well as the inflation-targeting phenomenon. Targets have been set so low, the editors argue, that in some cases a few bad shocks lead to deflation.
424 pages | 44 tables, 91 line drawings | 6 x 9 | © 2006
National Bureau of Economic Research East Asia Seminar on Economics
Economics and Business: Economics--Development, Growth, Planning, Economics--Econometrics and Statistics, Economics--International and Comparative, Economics--Money and Banking
Table of Contents
Acknowledgments
Introduction
Takatoshi Ito and Andrew K. Rose
I. Monetary Policy Strategies
1. A Monetary Policy Rule for Automatic Prevention of a Liquidity Trap
Bennett T. McCallum
Comment: James Harrigan
2. Monetary Policy, Asset-price Bubbles, and the Zero Lower Bound
Tim Robinson and Andrew Stone
Comment: Piti Disyatat
Comment: Kenneth Kuttner
3. Money Growth and Interest Rates
Seok-Kyun Hur
Comment: R. Anton Braun
Comment: Yuzo Honda
II. The Japanese Experience
4. Two Decades of Japanese Monetary Policy and the Deflation Problem
Takatoshi Ito and Frederic S. Mishkin
Comment: Kenneth Kuttner
Comment: Kazuo Ueda
5. Financial Strains and the Zero Lower Bound: The Japanese Experience
Mitsuhiro Fukao
Comment: Piti Disyatat
Comment: James Harrigan
6. Monetary and Fiscal Policy in a Liquidity Trap: The Japanese Experience 1999–2004
Mitsuru Iwamura, Takeshi Kudo, and Tsutomu Watanabe
Comment: Fumio Hayashi
7. Fiscal Remedies for Japan’s Slump
Laurence Ball
Comment: Mitsuru Iwamura
III. Case Studies
8. Stock Market Liquidity and the Macroeconomy: Evidence from Japan
Woon Gyu Choi and David Cook
Comment: Shin-ichi Fukuda
Comment: Makoto Saito
9. Interest Rate, Inflation, and Housing Price: With an Emphasis on Chonsei Price in Korea
Dongchul Cho
Comment: Toshiki Jinushi
Comment: Mario B. Lamberte
10. Deflation and Monetary Policy in Taiwan
Ya-Hwei Yang and Jia-Dong Shea
Comment: Toshiki Jinushi
Comment: Shigenori Shiratsuka
Contributors
Author Index
Subject Index