New transmission mechanisms and instruments of monetary policy at near zero-interest rates: the case of Japan in the late 1990s: Eric Girardin and Nicholas Horsewood

Introduction Monetary policy in Asia was one of the central themes of Max Fry's work. He had first-hand knowledge and experience of many east and south-Asian countries. Concerned mainly with developing Asia, he dealt with monetary policy reaction functions (e.g. Fry, 1995), as well as the effects of monetary policy on output dynamics (e.g. Fry and Lilien, 1986). He stressed that greater monetary discipline in the Pacific Basin developing economies was a major factor behind their superior economic performance. We will here examine the effects of monetary policy by focusing on the case of Japan.