The study looks at how Japan's monetary policy during the Lost Decade after the 1990s asset bubble collapse affected the economy. The Bank of Japan's interest-rate policy followed a standard approach with a 1 percent inflation target. The poor economic performance was mainly due to unexpected economic shocks, not a major policy mistake. Simply increasing the inflation target wouldn't have helped much. But using a price-targeting rule or a policy combining a higher inflation target with a stronger response to output would have led to better economic stability.