Around the world, governments have delegated political independence to central banks that wield tremendous power based on the belief that independence would allow these institutions to keep inflation in check. From the mid-1990s, Japan’s economy charted a unique trajectory: it fell into deflation and never fully emerged from it for nearly the next twenty years. Only with the election of Prime Minister Shinzō Abe at the end of 2012 and his appointment in early 2013 of new leadership at Japan’s central bank, the Bank of Japan (BOJ), did Japan finally launch a policy course capable of pulling Japan fully out of deflation. This presentation explains the shift in BOJ policy and factors behind it.
Gene Park, Associate Professor, Loyola Marymount University
James A. Wilcox, Professor, Haas School of Business
Steven Vogel, Professor, Political Science, UC Berkeley