IDEAS home Printed from https://ideas.repec.org/a/ime/imemes/v33y2015p97-200.html
   My bibliography  Save this article

Bank of Japan's Monetary Policy in the 1980s: A View Perceived from Archived and Other Materials

Author

Listed:
  • Masanao Itoh

    (Professor, Otsuma Women's University and IMES, BOJ)

  • Ryoji Koike

    (Deputy Head of Monetary History Studies Group, IMES, BOJ)

  • Masato Shizume

    (Professor, Waseda University and IMES, BOJ)

Abstract

This monographic paper summarizes views held by the Bank of Japan (hereafter BOJ or the Bank) in the 1980s regarding economic conditions and monetary policy formulation, perceived from the BOJ archives and other materials from the period. From a historical viewpoint, the authors see the 1980s as a watershed time for the Bank's policy formulation, because the Bank acquired lessons for monetary policy formulation under a large fluctuation in economic and financial conditions and innovated new approaches for monetary policy formulation and money market management as stated below. First, during the 1980s the BOJ had to largely consider the external imbalance in formulating policy, and attention began to shift towards price stability in the medium or long term by the end of the decade. Second, the large fluctuations in asset prices, money supply, and commercial bank lending were closely monitored during this period, but the Bank's assessment about their impacts on macroeconomic consequences in the medium to long term was insufficient. A reflection of these lessons appears to evolve into a perspective on the Bank's monetary policy formulation that financial imbalances should be examined as a risk for achieving price stability in the medium to long term. Third, in light of ongoing financial deregulation during this period, the Bank started to change monetary policy measures from those based on a regulated interest rate framework to those based on market operation with good use of money markets and flexible interest rates.

Suggested Citation

  • Masanao Itoh & Ryoji Koike & Masato Shizume, 2015. "Bank of Japan's Monetary Policy in the 1980s: A View Perceived from Archived and Other Materials," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 33, pages 97-200, November.
  • Handle: RePEc:ime:imemes:v:33:y:2015:p:97-200
    as

    Download full text from publisher

    File URL: https://www.imes.boj.or.jp/research/papers/english/me33-5.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Masanao Itoh & Yasuko Morita & Mari Ohnuki, 2020. "Monetary Policy in the 1990s: Bank of Japan's Views Summarized Based on the Archives and Other Materials," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 38, pages 55-168, November.
    2. Masato Shizume, 2017. "A History of the Bank of Japan, 1882-2016," Working Papers 1719, Waseda University, Faculty of Political Science and Economics.
    3. Yuto Iwasaki & Nao Sudo, 2017. "Myths and Observations on Unconventional Monetary Policy -- Takeaways from Post-Bubble Japan --," Bank of Japan Working Paper Series 17-E-11, Bank of Japan.
    4. Masanao Itoh & Yasuko Morita & Mari Ohnuki, 2020. "Monetary Policy in the 1990s: Bank of Japan's Views Summarized Based on the Archives and Other Materials," IMES Discussion Paper Series 20-E-06, Institute for Monetary and Economic Studies, Bank of Japan.
    5. Kosuke Aoki & Ko Munakata & Nao Sudo, 2019. "Prolonged Low Interest Rates and Banking Stability," IMES Discussion Paper Series 19-E-21, Institute for Monetary and Economic Studies, Bank of Japan.
    6. Masahiko Shibamoto & Wataru Takahashi & Takashi Kamihigashi, 2023. "Japan’s monetary policy: a literature review and empirical assessment," Journal of Computational Social Science, Springer, vol. 6(2), pages 1215-1254, October.
    7. Stefan Angrick & Naoyuki Yoshino, 2020. "From Window Guidance to Interbank Rates: Tracing the Transition of Monetary Policy in Japan and China," International Journal of Central Banking, International Journal of Central Banking, vol. 16(3), pages 279-316, June.
    8. repec:zbw:bofitp:2018_004 is not listed on IDEAS
    9. Katsurako Sonoda & Nao Sudo, 2015. "Is macroprudential policy instrument blunt?," Bank of Japan Working Paper Series 15-E-11, Bank of Japan.
    10. Cho, Sungjun & Hyde, Stuart & Liu, Liu, 2022. "The yen–dollar risk premium: A story of regime shifts in bond markets," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 78(C).
    11. Stefan Angrick & Naoyuki Yoshino, 2020. "From Window Guidance to Interbank Rates: Tracing the Transition of Monetary Policy in Japan and China," International Journal of Central Banking, International Journal of Central Banking, vol. 16(3), pages 279-316, June.

    More about this item

    Keywords

    Monetary policy management; Price stability in the medium and long term; Financial imbalance; External imbalance; Financial deregulation;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ime:imemes:v:33:y:2015:p:97-200. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kinken (email available below). General contact details of provider: https://edirc.repec.org/data/imegvjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.