Monetary Policy History
This paper starts with the overview of Japan’s economic development after World War II, in 1945 to the year 2013. The economic condition over time has direct effect on the country’s monetary policy. Japan has had a successful economy reconstruction after the World War II, focusing on high-tech, energy-saving and electronic industry. Till early 1970s, Japan’s economic development has already caught up to the US and European countries with an income ratio of 1 to 2.5 between Japan and US. Before 1973, Japan has an expansionary monetary policy, large scale public investment in railways and highways construction. Because of Japan’s energy dependency outside of its territory, the oil shocks in 1973-1974 has caused high inflation and has put Japan’s economy into recession or ‘stagnation’. Facing the economic stagnation, especially the inflation, Japan has been forced to tighten its monetary policy. Bank of Japan which is the monetary authority has been criticized to mishandling the high inflation and since then Bank of Japan began to target monetary growth to avoid inflation.
Facing the difficulty of economic stagnation, Japan still managed to achieve slow economic growth. In mid-late 1970s, the expansionary monetary policy has been reactivated to boost the economy through buying government bonds. In mid-1980s Japan has become the world’s largest exporter, the world’s largest creditor and the major financial player with huge amount of foreign currency reserves. Japan has had large trade surplus over US. Japanese yen has become a major currency highly associated with US dollars. However this has also made Japanese yen vulnerable because the appreciation of yen would associate with the loss of competitiveness of...
... middle of paper ...
...18-2014 from http://www.reuters.com/article/2014/03/16/us-bitcoin-mtgox-mizuho-idUSBREA2E01V20140316. History of Bitcoin. Retrieved 3-18-2014 from http://historyofbitcoin.org/.
List of alternative cryptocurrencies. Retrieved 3-18-2014 from https://en.bitcoin.it/wiki/List_of_alternative_cryptocurrencies. Kerr, D. (2014, March 6). Japan: 'Bitcoin isn't a currency'. Retrieved 3-18-2014 from http://news.cnet.com/8301-1023_3-57620033-93/japan-bitcoin-isnt-a-currency/. Ito, T, & Mishkin S.F. (2004). Two Decades of Japanese Monetary Policy and the Deflation Problem.
Cambridge, MA: NATIONAL BUREAU OF ECONOMIC RESEARCH.
Ohno, Kenichi. (2005). The Economic Development of Japan. Tokyo: GRIPS Development Forum.
What is bitcoin and why is it in trouble? Retrieved 3-18-2014 from
http://www.telegraph.co.uk/finance/currency/10660128/What-is-bitcoin-and-why-is-it-in-trouble.htm
In conclusion, Japan went through many transitions from the mid 1800’s to the early 1900’s. Transitions such as Transformations of Japanese Politics, to Meiji Economics, to Building a Modern Social Structure, and influence of Western Style. Through all changes Japan became a better established country. The Meiji government had made very resourceful and useful decisions that had benefitted Japan and it’s
In the following paper I will be examining the process of economic development in Japan. I begin with their history in the Meiji period and how that effected their great success in the postwar development. Then I will go through the different economic stages of economic development in postwar Japan. I will examine the high periods and low period in Japan economics, and the factors behind these shifts in development. Last I will give a conclusion and where I believe Japan economy will be in the future.
To try to combat the trend of failing banks, the Bank of Japan Governor, Masaru Hayami, started a “zero interest rate policy” in 1999. This move built confidence in Japanese banks and the Japanese economy. However, this positive reform did not last. Banks were not using this recovery policy to write off their bad loans. They also did not get rid of very risky stock market shares. Hayami became fed up with the actions of the banks and raised interest rates in August of 2000. Then when the stock market began falling, those risky shares that the banks owned caused them to lose even more money.
Account for the emergence of the ‘bubble economy’ in Japan and the reasons for the country’s slow recovery from it.
undervalue of yen was the reason of Japan's huge trade surplus. In order to impr...
During World War I Japan had successfully placed itself amongst the leaders of the Allied nations. Despite this the Japanese struggled against racial discrimination, which plagued Japanese-Western relations. However, racial discrimination was not one-sided, the Japanese strongly believed that they were spiritually superiors to their western counterparts. This superiority complex combined with Japan’s growth during the war fueled imperialistic desires. Japan aspired to be a contender in the global market economy, but Japan lacked vast resources that the United States and other western Allies possessed. During the great depression Japan’s economy was collapsing as exports declined which in turn led to political upheaval. “The American Hawley-Smoot tariff in 1930, followed the next year by British imperial preference, threatened to cause permanent damage to Japanese economy.” (Gordon, p. 140)
When talking about deflation, Japan will firstly come to people’s mind of its experiences during the past two decades. Japan has kept trying to solve the problems, however, most of the strategies that are used to recover its economy have been unsuccessful. This essay will be looking at the causes and impacts of the strategies used by Japan in fighting against the long lasting deflation.
In the following essay I will try to compare two highly developed economies, Japan and The United Kingdom. I will emphasize the success of their economies and how human capital, advancing technology (innovation), and FDI have contributed to their current success or failure. I will briefly discuss the contemporary history of each country, thoroughly cover their current conditions, and end with expectations for their future.
The Economic Effect on Japan during Post World War II. Japan’s economy was greatly affected by the atomic bombs dropped on both Hiroshima and Nagasaki. Japan’s economic recovery as a result of this incident transformed Japan’s economic growth, which has become known as the “Economic Miracle.” The bombs caused Japan to reconstruct many more facilities in which the economy moved forward. The Economic Planning Agency, which used to be known as the Economic Stabilization Board, helped Japan to become one of the leading economic nations.
Labonte, M. (January 7, 2014). Monetary Policy and the Federal Reserve; Current Policy and Conditions. Congressional Research Service.
When one thinks of Japan, what is the first thing that comes to mind? Advanced technology? Video games? Weird T.V. shows and anime? Before Japan began its transition into technology and advancement, they were in an era of both military action and strong nationalism which still impacts them today. Japan's military power and control over the East Asian region was its strongest feature for several hundred years. This changes dramatically with the 20th Century. By the turn of the century, Japan's strives to modernize and stay relevant to the global economy and system was its most vital aspect.
Export trends have been an important factor during Japan's present economic adjustment period, and the structures of Japanese exports, together with the imports, have been changing substantially in recent years. The changes in the country's export and import structures during the 1990s can be characterized by the following three key developments: (1) the weight of IT-related goods has been rising in both real exports and imports; (2) real imports of consumer goods from East Asia has been increasing; and (3) the US remains Japan's largest trading partner as a single country. Due to these factors, maintaining its comparative advantage became the priority in the current global economy.
The economy in the United States was recently experiencing what is now called the Great Recession which occurred from December of 2007 to June of 2009. During this recession we experienced a decrease in our gross domestic product and experienced an increase to our unemployment. Since 2003 the American economy has been seen inflation rates as low as .1% in 2008 and as high as 4.1% in 2007. Rates such as these detail the increase and decrease in prices of products throughout the economy and has a considerable influence on the supply and demand of goods from cars to bread. In the past ten years inflation rates have continually seen positive values w...
Japan’s rising yen and the decline of the US dollar, East Asia Forum, 2011. Available at:
An emerging market can be defined as a nation with business or social activity which it is on the process of industrialization and fast growth. The prime global economic story of the last years is the introduction and rise of emerging markets in the world economy. Emerging countries are mainly the countries which belong to the N-11. More specifically there are the MINT countries too, which belong to the N-11. MINT countries are consisted from Mexico, Indonesia, Nigeria and Turkey and they are currently the most promising emerging countries in the world. Due to precautionary and mercantilist reasons, the emerging markets are accumulating reserves for the past 30 years. This point puts the emerging countries in a position of being the larger reserve holders and simultaneously in a position where they can be saved from a crisis situation, like the one that they are experiencing now. The purpose of this essay is to determine the impact or impacts of the rise of emerging markets to the world economy. As the years passes a new world order is coming, with emerging markets being at the top of the list.