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| Transmission Effectiveness of Japanese Negative Interest Rate Policy and Its Significance |
| Ma Li You Yang |
| Economics and Management School， Wuhan University， Wuhan 430072 |
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Abstract This paper studied the transmission effectiveness of easy monetary policy with the negative interest rate policy and Quantitative and Qualitative Easing in Japan based on BVAR model by means of 171 data series in 9 districts and 47 prefectures， and conducted several robustness checks by the Minnesota prior distribution method and the Normal-Wishart prior distribution method. It concluded that， the negative interest rate policy in a short term could lower the unemployment rate to some extent， and boost output and the surge of inflation，but as a whole， the negative interest rate policy had not achieved the expectation of the monetary authorities，which was not a magic key to boost economy recovery. Hence monetary authorities should be more prudent to adopt the negative interest rate policy due to the failure of conventional monetary policy in ultra-low interest rates environment. In crisis， merely lowering rates may lead capital to virtual economy. Chinese monetary authorities should take initiative to develop the real economy and help enterprises enhance investment returns， which could balance and improve the supply side structural reforms and take a great leap of Chinese economy forward.
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Received: 21 May 2019
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2019, Vol. 58 
