Time of Troubles : The Yen and Japan's Economy, 1985-2008 / Maurice Obstfeld.

Format:

Book

Author/Creator:

Obstfeld, Maurice, author.

Series:

Working Paper Series (National Bureau of Economic Research) ; no. w14816.

NBER working paper series ; no. w14816

Language:

English

Subjects (All):

Monetary policy--Japan.

Monetary policy.

Japan--Economic conditions.

Japan.

Physical Description:

1 online resource (89 pages) : illustrations (black and white).

Place of Publication:

Cambridge, Massachusetts : National Bureau of Economic Research, 2009.

Summary:

This paper explores the links between macroeconomic developments, especially monetary policy, and the exchange rate during the period of Japan's bubble economy and subsequent stagnation. The yen experienced epic gyrations over that period, starting with its rapid ascent after the March 1985 Plaza Accord of major industrial countries. Two distinct periods of endaka fukyo, or recession induced by a strong yen, occurred in the late 1980s and the early 1990s at critical phases of the monetary policy cycle. My approach emphasizes the interaction of short-term developments driven by monetary factors (as they affect international real interest rate differentials) and the long-term determinants of the real exchange rate's equilibrium path. Chief among those long-run determinants are relative sectoral productivity levels and the terms of trade, including the price of oil. Since the mid-1990s, the yen's real exchange rate has generally followed a depreciating trend and Japan's comprehensive terms of trade have deteriorated.

Notes:

Description based on publisher supplied metadata and other sources.