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Hardcover | Out of Print | 246 pp. | 6.3 x 9.1 in | August 1997 | ISBN: 9780262032476
Paperback | $24.00 X | £17.95 | 246 pp. | 6.3 x 9.1 in | January 2003 | ISBN: 9780262515276

The Political Economy of Japanese Monetary Policy

Overview

In The Political Economy of Japanese Monetary Policy, Cargill, Hutchison, and Takatoshi investigate the formulation and execution of monetary and financial policies in Japan within a broad technical, political, and institutional context. Their emphasis is on the period since the collapse of the Bretton Woods system of fixed exchange rates in the early 1970s, and on the effects of policies and institutions in shaping the modern Japanese economy. The authors present basic themes and recent developments, as well as their own research findings. They also review and integrate the large literature in the area. They consider theoretical arguments and empirical evidence for each topic discussed.Topics covered include Japan's low inflation record (despite the central bank's lack of formal independence from the government); politically motivated business cycles and the timing of elections; exchange rate policy and international policy coordination; the historical development of central banking; Japan's "bubble economy" of the 1980s; and the causes, magnitude, and regulatory responses to Japan's banking and financial crisis of the 1990s.

About the Authors

Michael M. Hutchison is Professor of Economics at the University of California, Santa Cruz. He is coauthor of The Political Economy of Japanese Monetary Policy (MIT Press, 1997) and Financial Policy and Central Banking in Japan (MIT Press, 2000).



Takatoshi Ito is Professor of Economics at the Graduate School of Economics, University of Tokyo.

Endorsements

“In the past quater century, the Japenese economy has experienced severe exogenous shocks and severe business fluctuations. Japan was regarded as a top performer until the 1980s, but is now regarded as an example of the aftermath of asset bubbles. The authors combine their knowledge on this institutional, economic, and the political-economy of Japan with expert quantitative skills, and they manage to draw a comprehensive picture on wha seems to be an almost chaotic period of the Japanese economy.”
Koichi Hamada, Professor of Economics, Yale University
“This book is very informative and contains many interesting insights about the conduct of Japanese monetary policy, the interactions between the Ministry of Finance and the Bank of Japan, and the influence of politics on the choice of monetary policy. A nice feature of the 'case study' approach adopted in the book is that is makes it possible to understand the choice of policies against the background of other developments in the economy. This book will be useful to students of comparative monetary policy in macroeconomic context, as well as to policymakers.”
Alex Cukierman, Berglas School of Economics, Tel-Aviv University, Israel; and Center for Economic Research, Tilburg University, The Neatherlands
“An in depth coverage of monetary policy in Japan I particularly appreciated the attention devoted to politico-institutional aspects. A 'must' for anybody interested in the economy of Japan.”
Alberto Alesina, Professor of Economics and Government, Harvard University
“This is a book on an important topic by leading researchers in the field. The book is full of original materials, which are stimulating to scholars working in this field, but it also gives enough background information about Japanese monetary policy, so that other readers can also enjoy reading it.”
Takeo Hoshi, Visiting Associate Professor of the Endowed Chair on Economics of Risk and Information (Tokyo Marine & Fire Insurance), Faculty of Economics, Osaka University, Japan; Associate Professor of Economics, Graduate school of International Relations and Pacific Studies, University of California, San Diego
“This lively and topical book fully covers the recent dramatic developments in Japanese monetary events, including the financial bubble of 1985-90 and its subsequent collapse with resulting regulatory problems, which were mishandled and are still unresolved. With their political-economy and policy-oriented focus, the authors provide a consistently entertaning overview of Japanese monetary developments, with their descriptive analysis carefully supported by the more detailed (ecocentric) research that these authors have previously published. The authors are leading experts in this field, and this shows through in the high quality of the book.”
C.A.E Goodhart, CEO Deputy Director and Norman Sosnow Professor of Banking & Finance, Financial Markets Group, The London School of Economics
“In the past quater century, the Japanese economy has experienced severe exogenous shocks and severe business fluctuations. Japan was regardd as a top performer untill the 1980s, but is not regarded as an example of the aftermath of asset bubbles. The authors combine their knowledge on this institutional, economic, and the political-economy of Japane with expert quantitative skills, and they manage to draw a comprehensive picture of what seems to be an almost chaotic period of the Japanese economy.”
Koichi Hamada, Professor of Economics, Yale University
“Monetary policy in Japan, through the years of rapid growth, the `bubbleeconomy,' the Japanese banking crisis, and now a weak economy but withvirtual price stability, is one of the most interesting stories in moderncentral banking. Cargill, Hutchison, and Ito tell this story well. Moreimportant, they analyze the interaction of the economics and theinstitutions in a way that makes clear the central role that partypolitics, business practices, international pressures and otherinstitutional constraints often play in shaping the conduct of actualmonetary policy.”
Benjamin M. Friedman, William Joseph Maier Professor of PoliticalEconomy, Harvard University