The paper compares the boom-and-bust cycles in Japan and Europe with respect to the reasons for excessive booms, the … characteristics of the crises, and the (potential) effects of the crisis therapies. As in Japan the consequence of expansionary … well as gradual real income losses, the economic policy implication for Japan and Europe is the timely exit from the …

thereby increase surplus liquidity. East Asian central banks with more flexible exchange rate regimes also face surplus … liquidity that mainly emanates from past accumulation of foreign reserves. We show based on an augmented Barro …-Gordon-type central bank loss function that in both cases surplus liquidity limits monetary policy autonomy. In case of fixed exchange …

constitute long-term appreciation expectations on yuan and yen, which have made China and Japan vulnerable to U.S. interest rate … cuts and appreciation expectation shocks. For both China and Japan - at different points of time - self-fulfilling runs …