Comparative Analysis of the Effects of Monetary Policy in Japan and the US Based on the Expected Hypothesis
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This research paper compares the effects of monetary policy in United States with that of in Japan. This research implemented the recently revamped macro model and the VAR-model. Between 1986-1995, economic entities conjured their expectations of monetary policies based on the Keynesian expectation hypothesis, that monetary policy has an effects on recession, in Japan. Between 1996-2004, economic agents applied the expected price levels as the adaptive hypothesis in order to direct their investment related decisions. The investors have studied empirically between 1996-2004 that bubble collapse consequentially occurs after a incremental monetary policy and that monetary policy has no effects on recession. Between 2005-2013, the analytical figures point to the conclusion that rational expectation is the most appropriate hypothesis to expound upon economic realities. The American phenomenon between 2000-2015 is similar to Japan’s first period, that there is no expectations formation as if of the second term in Japan, and that american investors still believe the Keynesian expectation hypothesis. The theory reflects how monetary policies steadily but surely lose their effect over time in Japan. This should be duly noted by economic policy makers that Japan needs to be more cautious about monetary policy than the United States.
Abstract
This research paper compares the effects of monetary policy in United States with that of in Japan. This research implemented the recently revamped macro model and the VAR-model. Between 1986-1995, economic entities conjured their expectations of monetary policies based on the Keynesian expectation hypothesis, that monetary policy has an effects on recession, in Japan. Between 1996-2004, economic agents applied the expected price levels as the adaptive hypothesis in order to direct their investment related decisions. The investors have studied empirically between 1996-2004 that bubble collapse consequentially occurs after a incremental monetary policy and that monetary policy has no effects on recession. Between 2005-2013, the analytical figures point to the conclusion that rational expectation is the most appropriate hypothesis to expound upon economic realities. The American phenomenon between 2000-2015 is similar to Japan’s first period, that there is no expectations formation as if of the second term in Japan, and that american investors still believe the Keynesian expectation hypothesis. The theory reflects how monetary policies steadily but surely lose their effect over time in Japan. This should be duly noted by economic policy makers that Japan needs to be more cautious about monetary policy than the United States.
참고문헌 (25)
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