Monetary policy has fiscal implications that are especially pronounced at the zero lower bound. Independent central banks in advanced economies have considerable leeway to ease fiscal pressures faced by governments without compromising price stability. They also have the power to create...

In this paper, we construct a simple measure of sectoral credit shifts, defined as the dispersion of growth rates of bank loans across sectors, and investigate what effects they had on Japan's economy and what accounted for their development. We find that (i) during the 1990s, the amount of...

This paper analyzes whether or not Japanese nominal wages are rigid downward. By using time series cross section data on wages from the Japanese Wage Census, we find that wages do not exhibit serious downward rigidity. They do decline when macro labor market conditions worsen even in periods of...