Trend inflation and monetary policy regimes in Japan

    Research output: Contribution to journalArticle

    Abstract

    This paper examines the dynamics of trend inflation in Japan over the last three decades based on the smooth transition Phillips curve model. We find that there is a strong connection between the trend inflation and monetary policy regimes. The results also suggest that the introduction of the inflation targeting policy and quantitative and qualitative easing in the beginning of 2013 successfully escaped from the deflationary regime, but were not enough to achieve the 2% inflation target. Finally, our results indicate the significance of exchange rates in explaining the recent fluctuations of inflation and the importance of oil and stock prices in maintaining the positive trend inflation regime.
    Original languageEnglish
    Pages (from-to)137-152
    JournalJournal of International Money and Finance
    Volume92
    DOIs
    Publication statusPublished - 2019

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