Resource title

The Changing Role of the Yen/Dollar Exchange Rate for Japanese Monetary Policy

Resource image

image for OpenScout resource :: The Changing Role of the Yen/Dollar Exchange Rate for Japanese Monetary Policy

Resource description

This paper studies the role of the yen/dollar exchange rate in the Bank of Japan?s monetary policy reaction function. In contrast to prior estimations of reaction functions based on the Taylor-rule, we allow for regime shifts by estimating rolling coefficients from January 1974 to March 1999. The results show a temporary impact of the exchange rate on monetary policy around 1978/79 and a persistently increasing impact of the yen/dollar exchange rate after 1986. The ris ing importance of the yen/dollar exchange rate for Japanese monetary policy is in line with increasing efforts to stabilize the yen/dollar exchange rate by foreign exchange intervention after March 1999, when the nominal interest rate reached the zero boundary.

Resource author

Gunther Schnabl, Christian Danne

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/22090

Resource license

Adapt according to the presented license agreement and reference the original author.