Author(s)

Yoshito Funashima

Faculty of Economics, Tohoku Gakuin University, Sendai, Japan.

To test Paul Krugman’s pioneering proposal for escaping from liquidity traps, this study examines whether unconventional monetary policies under a zero lower bound decrease real interest rates in Japan. We find a sizable decline in real interest rates under zero interest rate policy and Abenomics monetary policy. In addition, we find no significant decline in real interest rates under other unconventional monetary policies, such as the first quantitative easing and comprehensive monetary easing.

Unconventional Monetary Policy, Real Interest Rate, Zero Lower Bound

Funashima, Y. (2018) Do the Bank of Japan’s Unconventional Monetary Policies Decrease Real Interest Rates under a Zero Lower Bound?. Open Journal of Social Sciences, 6, 122-130. doi: 10.4236/jss.2018.67010.