Asset Prices, Financial Liberalization and the Process of Inflation in Japan

46 Pages Posted: 15 Feb 2006

See all articles by Alexander W. Hoffmaister

Alexander W. Hoffmaister

International Monetary Fund (IMF) - Research Department

Garry J. Schinasi

Independent Advisor, Global Financial Stability

Date Written: December 1994

Abstract

This paper examines the extent to which the Japanese asset price cycle of the 1980s was determined by monetary factors, the real business cycle, and financial liberalization. Strong evidence is found of a shift in the relationships between monetary factors and land price inflation in the early 1980s. In particular, the estimated parameters of a vector autoregression imply that the transmission of monetary factors to asset prices was greater in the 1980s than In the 1970s. A key conclusion is that monetary shocks led to more asset price inflation and less consumer price inflation in the 1984-93 period than during 1970-83.

JEL Classification: G12, E31, E44, C32

Suggested Citation

Hoffmaister, Alexander W. and Schinasi, Garry J., Asset Prices, Financial Liberalization and the Process of Inflation in Japan (December 1994). IMF Working Paper, Vol. , pp. 1-46, 1994. Available at SSRN: https://ssrn.com/abstract=883912

Alexander W. Hoffmaister (Contact Author)

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Garry J. Schinasi

Independent Advisor, Global Financial Stability ( email )

Washington, 20008
+1-202-361-0958 (Phone)

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