Monetary policyMonetary policy is the policy adopted by the monetary authority of a nation to affect monetary and other financial conditions to accomplish broader objectives like high employment and price stability (normally interpreted as a low and stable rate of inflation). Further purposes of a monetary policy may be to contribute to economic stability or to maintain predictable exchange rates with other currencies.
Quantitative easingQuantitative easing (QE) is a monetary policy action where a central bank purchases predetermined amounts of government bonds or other financial assets in order to stimulate economic activity. Quantitative easing is a novel form of monetary policy that came into wide application after the financial crisis of 20072008. It is used to mitigate an economic recession when inflation is very low or negative, making standard monetary policy ineffective.
G7The Group of Seven (G7) is an intergovernmental political forum consisting of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States; additionally, the European Union (EU) is a "non-enumerated member". It is organized around shared values of pluralism, liberal democracy, and representative government. As of 2020, G7 members are large IMF advanced economies and account for over half of global net wealth (at over $200 trillion), 30 to 43 percent of global gross domestic product, and 10 percent of the world's population (770 million people).
Shinzo AbeShinzo Abe ('ʃɪnzoʊ_'ɑːbeɪ ; 安倍 晋三, Hepburn: Abe Shinzō, abe ɕindzoː; 21 September 1954 – 8 July 2022) was a Japanese politician and statesman who served as Prime Minister of Japan and President of the Liberal Democratic Party (LDP) from 2006 to 2007 and again from 2012 to 2020. He was the longest-serving prime minister in Japanese history, serving for almost nine years in total. Abe also served as Chief Cabinet Secretary from 2005 to 2006 under Junichiro Koizumi and was briefly the opposition leader in 2012.
Government of JapanThe Government of Japan consists of legislative, executive and judiciary branches and is based on popular sovereignty. The Government runs under the framework established by the Constitution of Japan, adopted in 1947. It is a unitary state, containing forty-seven administrative divisions, with the Emperor as its Head of State. His role is ceremonial and he has no powers related to Government. Instead, it is the Cabinet, comprising the Ministers of State and the Prime Minister, that directs and controls the Government and the civil service.
Economy of JapanThe economy of Japan is a highly developed/advanced social market economy, often referred to as an East Asian model. It is the third-largest in the world by nominal GDP and the fourth-largest by purchasing power parity (PPP). It is the world's second-largest developed economy. Japan is a member of both the G7 and G20. According to the IMF, the country's per capita GDP (PPP) was at $51,809 (2023). Due to a volatile currency exchange rate, Japan's GDP as measured in dollars fluctuates sharply.
Japanese asset price bubbleThe Japanese asset price bubble was an economic bubble in Japan from 1986 to 1991 in which real estate and stock market prices were greatly inflated. In early 1992, this price bubble burst and Japan's economy stagnated. The bubble was characterized by rapid acceleration of asset prices and overheated economic activity, as well as an uncontrolled money supply and credit expansion. More specifically, over-confidence and speculation regarding asset and stock prices were closely associated with excessive monetary easing policy at the time.
Inflation targetingIn macroeconomics, inflation targeting is a monetary policy where a central bank follows an explicit target for the inflation rate for the medium-term and announces this inflation target to the public. The assumption is that the best that monetary policy can do to support long-term growth of the economy is to maintain price stability, and price stability is achieved by controlling inflation. The central bank uses interest rates as its main short-term monetary instrument.
Interest rateAn interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, the compounding frequency, and the length of time over which it is lent, deposited, or borrowed. The annual interest rate is the rate over a period of one year. Other interest rates apply over different periods, such as a month or a day, but they are usually annualized.
Meiji RestorationThe Meiji Restoration, referred to at the time as the Honorable Restoration, and also known as the Meiji Renovation, Revolution, Regeneration, Reform, or Renewal, was a political event that restored practical imperial rule to Japan in 1868 under Emperor Meiji. Although there were ruling emperors before the Meiji Restoration, the events restored practical abilities and consolidated the political system under the Emperor of Japan. The goals of the restored government were expressed by the new emperor in the Charter Oath.
