Prof. Koichi Hamada speaks on monetary policy and Japan’s economic recovery

On June 13, 2012, Koichi Hamada, Tuntex Professor of Economics at Yale University and a Director of Friends of UTokyo, gave a speech titled “Monetary Policy and Japan’s Economic Recovery–May the Bank of Japan (BOJ) Never Turn Back Again!” at Japan Society of New York. The presentation was moderated by Dr. Paul Sheard, Standard and Poor’s chief global economist.
The Yen and the Japanese stocks reacted sharply after the BOJ unexpectedly adopted the policy of inflationary target of one per cent and increased the ceiling for the purchase of government bonds in February 2012.  The questions still remain whether the BOJ is serious enough, and whether Japan can pull itself out of the malaises of deflation and strong yen, especially when faced with the challenges of its energy policy, the European financial turmoil, and a growing fiscal deficit. Hamada urges that the BOJ should continue firmly the measures it took on Valentine’s Day.  Hamada asserts “Natural policy prescription is the use of monetary expansion in a proper way, i.e., not only by the purchases of traditional short-term government debt but also by the purchases of longer term and wider ranging securities, and even by the purchases of foreign currencies as well.” In his view, the BOJ tried a natural policy prescription at least part of the way last February, even though it showed attitudes that were skeptical of its own policy.
If you wish to view the slides presented in his lecture, please click here.

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