Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Proceedings of the 7th International Conference on Economic Management and Green Development
Series Vol. 39 , 10 November 2023
Open
Access | Article
The Impact of Japan's “Yield Curve Control” (YCC) on Inflation of Japan
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Abstract
After the bursting of the bubble crisis in Japan, the government adopted a series of quantitative easing policies to improve the weak economic environment and promote economic growth. in September 2016, the Japanese government began to implement the yield curve control policy to improve the economic environment by controlling the yield on government bonds. the YCC policy, in theory, could promote economic growth and achieve the inflation target in Japan, but the actual effect was lacking. This paper analyses the main reason for the unsatisfactory implementation of the yield curve policy in Japan is the special social environment in Japan. Although the YCC policy has led to an increase in the money circulating in the market, after firms have received the money, they do not expand their investment production at home due to Japan's own lack of domestic demand, but choose to invest the money in stocks, government bonds or other overseas markets for profit. After the money flowed around the market, it went back to the capital market without making the liquidity in the market increase. This paper uses Granger causality tests to analyze the causal relationship between the ageing population, personal savings, average wage and the inflation rate in Japan, and finds through the tests that the inflation rate conversely affects the above factors. The interaction between these two factors has trapped the Japanese economy in a cycle of economic malaise, which is difficult to break with YCC policy.
Keywords
Japan, YCC, deflation, inflation
References
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Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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- Volume Title
- Proceedings of the 7th International Conference on Economic Management and Green Development
- ISBN (Print)
- 978-1-83558-099-8
- ISBN (Online)
- 978-1-83558-100-1
- Published Date
- 10 November 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/39/20231931
- Copyright
- 10 November 2023
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited