Japanese inflation target a partial success – Fed paper
Effects seem to have been hampered by limited credibility
Adopting an inflation target during a liquidity trap can have powerful effects on output and inflation, but the move seems to have been hampered in Japan by credibility problems, authors from the Federal Reserve find in a discussion paper.
Andrea De Michelis and Matteo Iacoviello use a vector autoregression to model the effects of introducing an inflation target in their paper, Raising an Inflation Target: the Japanese Experience with Abenomics. They find the effects are more powerful during a
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