Tumultuous Times: Central Banking in an Era of Crisis

by Masaaki Shirakawa

Overview

A rare insider’s account of the inner workings of the Japanese economy, and the Bank of Japan’s monetary policy, by a career central banker
 
The Japanese economy, once the envy of the world for its dynamism and growth, lost its shine after a financial bubble burst in early 1990s and slumped further during the Global Financial Crisis in 2008. It suffered even more damage in 2011, when a severe earthquake set off the Fukushima Daiichi nuclear disaster. However, the Bank of Japan soldiered on to combat low inflation, low growth, and low interest rates, and in many ways it served as a laboratory for actions taken by central banks in other parts of the world. Masaaki Shirakawa, who led the bank as governor from 2008 to 2013, provides a rare insider’s account of the workings of Japanese economic and monetary policy during this period and how it challenged mainstream economic thinking.

Product Details

ISBN-13:	9780300258974
Publisher:	Yale University Press
Publication date:	08/10/2021
Series:	Yale Program on Financial Stability Series
Pages:	536
Product dimensions:	6.12(w) x 9.25(h) x (d)

About the Author

Masaaki Shirakawa is distinguished professor at Aoyama Gakuin University in Japan and was governor of the Bank of Japan from 2008 to 2013 and vice chairman of the board of directors of the Bank for International Settlements from 2011 to 2013. He is also a member of the Group of 30.

Table of Contents

Prologue 1

Part 1 Career Building at the Bank of Japan

Chapter 1 Starting My Career 15

Chapter 2 The Japanese Bubble Economy 27

Chapter 3 The Bursting of the Bubble and the Financial Crisis 48

Chapter 4 The New Bank of Japan Act 74

Chapter 5 The Zero Interest Rate Policy and Quantitative Easing 88

Chapter 6 The Illusion of the Great Moderation 115

Part 2 The Days as Governor

Chapter 7 My Appointment as Governor of the Bank of Japan 133

Chapter 8 The Collapse of Lehman Brothers 146

Chapter 9 The Increasing Clamor for Beating Deflation 175

Chapter 10 Demographic Challenges and Raising Productivity 203

Chapter 11 The European Debt Crisis 220

Chapter 12 The Comprehensive Monetary Easing Policy 234

Chapter 13 The Great East Japan Earthquake 255

Chapter 14 Sixfold Suffering and the Currency War 272

Chapter 15 The Sustainability of Government Finances 293

Chapter 16 Enhancing the Stability of the Financial System 314

Chapter 17 The Joint Statement by the Japanese Government and the Bank of Japan 334

Part 3 The Roles of the Central Bank

Chapter 18 The Great Monetary Experiment and the Spread of Japanification 363

Chapter 19 Lessons from the Experiences of the Japanese Economy 373

Chapter 20 What Should We Expect of the Central Bank? 390

Chapter 21 The Global Cooperation of Central Banks 406

Chapter 22 The Independence and Accountability of the Central Bank 422

Chapter 23 The Central Bank as an Organization 436

Epilogue 453

Notes 455

References 471

Acknowledgments 489

Index 495

Editorial Reviews

I recommend the book for not only the students of the Japanese economy but also a wider set of audience who are interested in central banking and policy making in general.”—Takeo Hoshi, Business Economics

“Economists and policymakers in the West used to lecture Japan. With global economic stagnation, now is the time to learn from Japan. There is no better teacher than Masaaki Shirakawa.”—Mervyn King, former governor of the Bank of England

“Masaaki Shirakawa offers a unique insight into the working of one of the world’s most important central banks. This book is essential reading for anyone interested in Japan’s experience and the lessons it carries for countries now facing Japan-style problems.”—Raghuram G. Rajan, author of The Third Pillar: How Markets and the State Leave the Community Behind

“In his masterful book, Masaaki Shirakawa takes us inside the room at the Bank of Japan. We learn keen insights from a leader who never sought attention, but whose ideas proved critical to global policy responses. Shirakawa reminds us—perhaps, most importantly—that the tumultuous times for central banks are not over.”—Kevin Warsh, former governor of the Federal Reserve Board

From the Publisher