Things we must consider in shaping Japanese economic policy for the future
Keiichiro Kobayashi 10 February 2013
Japan is under new leadership, bringing fresh attempts to tackle deflation. This column argues that the lessons we can learn are Going forward, a change of party politics with every change of government will likely become a recurring event in Japan. In order to restore people’s confidence in the fiscal management and social security system in the light of that prospect, institutional systems should be designed in a way to allow flexibility, premised on the fact that the government cannot make commitments into the remote future. Political leaders – whether they belong to the ruling or opposition parties – need to come up with new ideas toward achieving that end.
With the Japanese government now under the stewardship of Prime Minister Shinzo Abe, Japan is set to pursue economic policy that calls for bold monetary easing in order to end deflation. The policy is predicated on the perception that once Japan successfully exits from deflation – by setting an explicit inflation target and taking bold monetary easing measures – the economy will grow and jobs will be created.
Institutions and economics Politics and economics
Japan, policymaking, Ageing
The dangers of increased transparency in monetary policymaking
Ellen E. Meade, David Stasavage 26 June 2008
Central banks are increasingly transparent but is the spotlight is stifling? Analysis of FOMC transcripts before and after Committee members knew that they would be published shows how transparency deadened the debate and reduced the number of challenges to Greenspan’s position.
Since the mid-1990s, there has been a trend towards greater transparency in economic policymaking – particularly with respect to monetary policy – and a number of central banks, including Sweden’s Riksbank and Britain’s Bank of England, have adopted a very transparent monetary policy regime known as inflation targeting. The United States does not subscribe to inflation targeting, but the Fed has also become much more transparent about its policymaking and operations over the past 15 years.
Institutions and economics Monetary policy
transparency, Central Banks, policymaking