• Analyses & Alternatives
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• v.2 no.2
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• pp.143-162
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• 2018

This paper focuses on the policy framework about "Quantitative and Qualitative Easing (QQE)" of Japan, and analyzes reasons why the policy goal was not reached. The QQE was introduced by the Bank of Japan in 2013 with the purpose of meeting the price stability target of 2% and getting out of deflation that prevents sustained price decline. However, despite the implementation of the bold monetary easing policy unprecedented in the world, the policy goal was not achieved as of June 2018. As a result of analyzing the causes, the following three structural factors were confirmed. 1) The rise in prices by QQE was limited because Japan's consumer price is strongly depending on import price. 2) The effect is high degree of uncertainty and limited because theoretical framework of reflationist which adopted QQE depends on "expectation formation" by "self-fulfilling expectation" and "multiple equilibria". 3) It was confirmed that the expansion of the monetary base did not lead to money stock due to the existence of Japanese liquidity trap, long-term low interest rate policy.