[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-321343-105":59,"doc-detail-321343-en":131},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":124,"head_meta":126,"extra_data":128,"updated_unix":130},105,"en","communication-credibility-and-price-stability-lessons-learned-from-japan","Communication, Credibility, and Price Stability - Lessons Learned from Japan","","Central banks have increasingly improved monetary policy transparency by communicating clearly with the public, strengthening accountability and potentially boosting policy effectiveness. The Bank of Japan’s mid-February steps clarified and reinforced its commitment to price stability by announcing specific numerical inflation goals and expanding asset purchases. The document explains how credible inflation objectives matter especially at the zero bound, where monetary policy works mainly through expectations of future easy policy.",{"@graph":69,"@context":123},[70,84,106],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/communication-credibility-and-price-stability-lessons-learned-from-japan/321343/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/communication-credibility-and-price-stability-lessons-learned-from-japan/321343.png","ImageObject",300,407,{"name":92,"@type":93},"Quinn","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-29","2026-09-21",true,{"@type":102,"interactionType":103,"userInteractionCount":105},"InteractionCounter",{"@type":104},"ViewAction",11,{"@type":107,"mainEntity":108},"FAQPage",[109,115,119],{"name":110,"@type":111,"acceptedAnswer":112},"Why does clearer communication improve monetary policy effectiveness?","Question",{"text":113,"@type":114},"Clear communication increases transparency and accountability, helping expectations respond more effectively to monetary policy developments.","Answer",{"name":116,"@type":111,"acceptedAnswer":117},"How does monetary policy work when interest rates are near zero?",{"text":118,"@type":114},"With rates near the zero bound and falling prices, standard operations lose strength, so policy must work by shaping expectations that policy will remain easy to generate price increases.",{"name":120,"@type":111,"acceptedAnswer":121},"What does the Bank of Japan do to define and make price stability credible?",{"text":122,"@type":114},"It links price stability to achieving a persistent inflation outlook consistent with households’ and businesses’ decisions, and it emphasizes credibility through clearly communicated quantitative 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steps to increase the transparency of their monetarypolicies through clearer communications with the public.While there are many differences between the economicchallenges Japan has been strugling with in the past decade and those facing U.S.and European central bankers now,we can learn a great deal about combating deflation from Japan's experiences.  \nIn mid-February,the Bank ofJapan took steps to clarifyand strengthen its commitment to price stability and toimprove its credibility for monetary policy.It announcedspecific numerical goals for inflation,both in theimmediate and medium-to-long term,and expanded itsasset-purchase program.  \nThe Bank's efforts to clearly communicate an inflationobjective are not unique.Over the past couple of decades,many central banks have been taking steps to increase thetransparency of their monetary policies through clearercommunications with the public.Doing so not only increas-es their accountability to the public-especially importantgiven most central banks'political independence-it canactually enhance the effectiveness of their monetary policies.  \nBut while the recentJapanese announcement is clearlya step in the right direction,the Bank ofJapan's experi-ence illustrates the struggle that central banks can facein communicating an inflation objective in a deflationaryenvironment.The Bank ofJapan entered the fray with astrong reputation as an inflation hawk but found that ithad to revise its message in order to clarify its inflationgoal asJapanese price levels fell.  \nWhen interest rates approach zero and deflation is a recurringproblem,as has been the case inJapan,monetary policyprimarily affects economic activity by creating expectationsof future inflation.A clear,credible statement of an inflationobjective can enhance the expectations effects of monetarypolicy.Economists and policymakers can learn a greatdeal about this monetary-policy expectations channel fromtheJapanese efforts to communicate a credible inflationobjective when prices are falling.  \n## Communication at the Zero Bound\n\nWhen short-term interest rates come close to zero,theeffectiveness of monetary policy wanes because bankreserves,which earn very little interest,and short-termsecurities,which now also earn very little interest,become near-perfect substitutes on banks'balance sheets.In this situation,standard monetary-policy operations,which substitute reserves for short-term governmentsecurities,are not likely to affect short-term interest ratesand to spur much bank lending and economic activity.If,inaddition,prices are falling,households and businesses willpostpone borrowing and spending.If goods are cheapertomorrow,why not wait?  \nIn such deflationary situations,monetary policy can stillwork by creating expectations that the central bank willkeep monetary policy easy-that is,keep short-term interestrates very low-as long as it takes to generate price increases.Central banks operating in this vein buy long-term securitiesin order to drive down their interest rates.To the extent thatlong-term interest rates embody expectations of future short-term rates,such operations are only effective if the centralbank's actions successfully alter expectations.In times wheneconomic activity is weak and current short-term interestrates are near their zero bound,this expectations channel islikely to exert a bigger force on economic decisions than thedirect impacts of adding reserves to the banking system.  \nA willingness to talk openly about the intended objectivesand methods of such operations can only reduce the public'suncertainty about future monetary policy.Less uncertaintymust surely enhance how expectations respond to suchmonetary-policy developments.If completely transparentand perfectly credible,communications about future opera-tions conceivably should affect financial variab","cbCaice2pitsrzW9","https://ap.wps.com/l/cbCaice2pitsrzW9","pdf",1480292,"English","# Communication at the Zero Bound\n## Defining Price Stability","[{\"question\":\"Why does clearer communication improve monetary policy effectiveness?\",\"answer\":\"Clear communication increases transparency and accountability, helping expectations respond more effectively to monetary policy developments.\"},{\"question\":\"How does monetary policy work when interest rates are near zero?\",\"answer\":\"With rates near the zero bound and falling prices, standard operations lose strength, so policy must work by shaping expectations that policy will remain easy to generate price increases.\"},{\"question\":\"What does the Bank of Japan do to define and make price stability credible?\",\"answer\":\"It links price stability to achieving a persistent inflation outlook consistent with households’ and businesses’ decisions, and it emphasizes credibility through clearly communicated quantitative goals.\"}]","Communication, Credibility, and Price Stability - Lessons Learned from Japan | PDF",1789959042,13]