Japan's Monetary Policy Effectiveness Tested: Taylor Rule Offers Insight for Future
The study looked at how effective Japan's monetary policy was from 1986 to 2010 using a model called the Taylor rule. This model combines interest rates, inflation rates, and potential output to assess monetary policy. The results showed that while there were some issues with applying the Taylor rule to Japan, it can still be a useful tool for evaluating Japan's monetary policy and guiding future decisions.