Japan's deflation, problems in the financial system and monetary policy

by Naohiko Baba, Shinichi Nishioka, Nobuyuki Oda, Masaaki Shirakawa, Kazuo Ueda and Hiroshi Ugai

On 18-19 June 2004, the BIS held a conference on "Understanding Low Inflation and Deflation". This event brought together central bankers, academics and market practitioners to exchange views on this issue (see the conference programme in this document). This paper was presented at the workshop. The views expressed are those of the author(s) and not those of the BIS.

JEL classification: E43, E44, E52, E58, G12

Keywords: zero interest rate policy, quantitative monetary easing policy, commitment, deflation, financial accelerator, negative interest rate, investor behavior