Japan has experienced prolonged economic stagnation throughout the 1990s and beyond. The government's monetary policies do not to seem to have been effective in eradicating deflation and increasing the money supply. A decrease in the money multiplier is said to be one reason for this. This paper...

This study investigates changes in the contemporary Japanese economics and the effects of macroeconomic policies in the 1990s. We estimate several vector autoregression (VAR) models employing data detrended by different methods. This paper presents three major findings: First, there is a gradual...

Although the Bank of Japan has recently (in 2003) conducted an expansionary monetary policy that targets the current accounts balance, additional monetary policies aimed at overcoming the deflationary situation may be necessary. No monetary vehicle to stimulate the economy under the "zero...

The money multiplier is in a continuous downward trend now since the bubble burst, and, in addition, the trend has accelerated after 2000. It is said that the monetary policy is difficult because the money multiplier has declined. To think about the monetary policy for the future, we should...

The Great Depression in Japan, also known as the Showa Depression, was not as serious as the Great Depressions in other countries. There have been many arguments to back up this claim: Harada, Sato, and Nakazawa [2007] concluded that Japan's monetary policy alleviated the Depression. This...

Many studies agree that the Great Depression in the 1930s was caused by deflationary monetary policy, but few empirical studies have been conducted on the Showa Depression in Japan. Among them, some argue that fiscal policy is effective in stimulating the economy, but others do not. And, most...

Many banks went bankrupt during the "Showa financial crisis" and the "Showa depression." Many have argued that the bankruptcies were an important factor in the worsening of the depression. Even during that grim time, however, finance from capital markets increased and, especially, issuance of...

This study starts to analyze the comprehensive economic impact and transmission mechanisms of the quantitative monetary easing policy (QMEP) based on Honda et al.[2007]. Analysis using the VAR model has shown the following four observations. First, an increase of base money raises aggregate...

Japan's economic growth rate dropped from three percent in the first half of the 1980s to one percent in the 1990s and beyond. It's not unreasonable, then, to call this Japanese economic situation "the Great Recession." What went wrong in Japan? First, we surveyed some proposed explanations,...

It is often argued that Japan's deteriorated banking sector continues to seriously affect its economy, but few empirical studies support that argument. Still, it is useful to examine the relationship between the weakness of the banking sector and Japan's low economic performance. In this study,...