Premature fiscal policy tightening is part of the reason why inflation did not gain much momentum after the BoJ launched large-scale quantitative easing in 2013. But the main reason why inflation has remained stubbornly low is that the huge expansion in the Bank’s balance sheet has translated into only modest gains in bank lending and broad money.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services