IDEAS home Printed from https://ideas.repec.org/a/hit/ecorev/v74y2023i1-2p6-6.html
   My bibliography  Save this article

Bank of Japan’s Monetary Policy to Work on Expectations : Game Theoretic Considerations

Author

Listed:
  • UI, Takashi

Abstract

From 2013 to 2022, the Bank of Japan tried and failed to achieve a two percent inflation target by influencing people’s inflation expectations. This study examines the difficulty in manipulating inflation expectations from a game theory perspective. When the expected rate of inflation is stable over a long period, it becomes common knowledge, and thus, a convention in David Lewis’s sense. Manipulating inflation expectations requires the manipulation of common knowledge, for which certain devices are necessary. As an example of successful common knowledge manipulation, we consider the Real Plan implemented in Brazil in 1994 and discuss its connection to narrative economics because one way to manipulate common knowledge is to create a narrative.

Suggested Citation

  • UI, Takashi, 2023. "Bank of Japan’s Monetary Policy to Work on Expectations : Game Theoretic Considerations," Economic Review, Hitotsubashi University, vol. 74(1-2), pages 6-6, October.
  • Handle: RePEc:hit:ecorev:v:74:y:2023:i:1-2:p:6-6
    as

    Download full text from publisher

    File URL: https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/83080/keizaikenkyu074033323.pdf
    Download Restriction: no
    ---><---

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

    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:hit:ecorev:v:74:y:2023:i:1-2:p:6-6. 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: Digital Resources Section, Hitotsubashi University Library (email available below). General contact details of provider: https://edirc.repec.org/data/iehitjp.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.