Hiroshi Ugai

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BIS Working Papers are written by members of the Monetary and Economic Department of the Bank for International Settlements, and from time to time by other economists, and are published by the Bank. The views expressed in them are those of their authors and not necessarily the views of the BIS. the BIS held a conference on " Understanding Low Inflation and(More)
This paper studies the optimal long-run inflation rate (OIR) in a small NewKeynesian model, where the only policy instrument is a short-term nominal interest rate that may occasionally run against a zero lower bound (ZLB). The model allows for worst-case scenarios of misspecification. The analysis shows first, if the government optimally commits, the OIR is(More)
What is the correctly measured inflation rate that monetary policy should aim for in the long-run? This paper characterizes the optimal inflation rate for the U.S. economy in a New Keynesian sticky-price model with an occasionally binding zero lower bound on the nominal interest rate. Real-rate and mark-up shocks jointly determine the optimal inflation rate(More)
This paper reviews the experience of US monetary policy from 2000 to shed some light on issues regarding the effectiveness of monetary policy in a low inßation era. Our analysis is twofold. First, based on a simple inßation forecast targeting model introduced in Svensson (1997) and Kato and Nishiyama (2002) as its variant, we demonstrate that the actual(More)
Using a model of island economy where financial markets aggregate dispersed information of the public, we analyze how two-way communication between the central bank and the public affects inflation dynamics. When inflation target is observable and credible to the public, markets provide the bank with information about the aggregate state of the economy, and(More)
This paper surveys the empirical analyses that examine the effects of the Bank of Japan’s (BOJ’s) quantitative easing policy (QEP), which was implemented from March 2001 through March 2006. The survey confirms a clear effect whereby the commitment to maintain the QEP fostered the expectations that the zero interest rate would continue into the future,(More)
This paper characterizes the optimal in‡ation rate in a standard macro model, which accounts for an occasionally-binding zero lower bound on nominal interest rates and model uncertainty. Estimates of the optimal rate of in‡ation, as measured by the PCE price index, range 0.7 to 1.4 percent per year. Even under extreme model uncertainty, the optimal in‡ation(More)
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