Research Article Open Access

How Can the Public Monitor Monetary Policy?

Takashi Senda1
  • 1 Hiroshima University, Japan

Abstract

On August 11, 2000, the Bank of Japan made one of the most controversial decisions in the history of monetary policy when it ended its zero-interest-rate policy and increased the overnight rate to 0.25%. This paper aims to examine whether or not this decision to terminate the zero-interest-rate policy was premature. In this study, I argue that this decision by the Bank of Japan to tighten monetary policy in 2000 was unreasonable as there still remained a great deal of slack in the economy and inflation was not far from its target. On reading the minutes of the Monetary Policy Meeting of August 11, 2000, I observe that some arguments for tightening monetary policy seem to confuse rates of change and levels.

American Journal of Economics and Business Administration
Volume 9 No. 2, 2017, 38-46

DOI: https://doi.org/10.3844/ajebasp.2017.38.46

Submitted On: 30 April 2017 Published On: 6 July 2017

How to Cite: Senda, T. (2017). How Can the Public Monitor Monetary Policy?. American Journal of Economics and Business Administration, 9(2), 38-46. https://doi.org/10.3844/ajebasp.2017.38.46

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Keywords

  • Monetary Policy
  • Forecast Targeting
  • Inflation Targeting
  • Bank of Japan
  • JEL Codes: E52, E58