Bank of Japan's Unconventional Policy Risks 'Monetization' Trap, Fed Remains Flexible
The article discusses the differences between conventional and unconventional monetary policies of the Federal Reserve Board and the Bank of Japan. Conventional policy involves regulating money supply through short-term interest rates, while unconventional policy directly controls the amount of base money. The Bank of Japan follows unconventional policy, while the Federal Reserve Board sticks to conventional policy. This distinction affects their ability to implement flexible exit strategies.