In recent years, an increasing number of central banks use macro stress-testing as a main tool to assess the robustness of the financial system against severe stresses to the economy, such as deep recessions and sharp rises in interest rates. This paper describes a framework for macro...

In this paper, we empirically analyze the interaction between the distortions in the real side of the economy (real distortion) and those in the financial side of the economy (financial distortion) in Japan after the 1990s. We focus on protracted economic stagnation after the bursting of the...

The primary objective of the Bank of Japan (BOJ) in conducting monetary policy is to promote sustainable growth by achieving price stability. The price stability that needs to be achieved is regarded as not just short-term and temporary, but sustainable in the medium to long term, which is the...

This paper reexamines Japanfs experience of the quantitative easing policy (QEP) in light of the policy responses against the recent financial and economic crisis. Central banks use various unconventional measures in the range of financial assets being purchased and in the scale of such...

This paper studies the effects of quality changes on Japan's CPI by estimating a quality adjusted price index (hedonic price index) for discounted personal computers during 1990-94. According to the result, quality adjusted prices for personal computers in Japan have declined at an annual rate...

Few will argue against the view that price stability plays an important role in promoting medium- to long-term economic growth. However, a consensus has yet to be gained as to how we should define price stability in the context of monetary policy operations and a desirable rate of inflation. In...