Kuroda reiterates BOJ not considering helicopter money
April 20, 2016 5:12 am
Although economic growth and inflation still weakens, Bank of Japan Governor Haruhiko Kuroda stressed the central bank rules out using helicopter money, saying the law prohibits such a move.
Article 5 of the Public Finance Law forbids the BOJ from funding fiscal stimulus. However, some analysts argued the Bank of Japan Act allows certain exceptions, provided the country’s prime minister and the finance minister authorize monetary policies seeking to bolster growth.
Kuroda said the central bank works on policies while the Japanese government decides on fiscal policy, effectively separating two entities.
Nobel laureate Milton Friedman came up with this concept in 1969. The idea stipulates a central bank can buy debt directly to the government for newly released money which has been incorporated into the country through spending programs or tax reductions.
The material has been provided by InstaForex Company – www.instaforex.com
Although economic growth and inflation still weakens, Bank of Japan Governor Haruhiko Kuroda stressed the central bank rules out using helicopter money, saying the law prohibits such a move.
Article 5 of the Public Finance Law forbids the BOJ from funding fiscal stimulus. However, some analysts argued the Bank of Japan Act allows certain exceptions, provided the country’s prime minister and the finance minister authorize monetary policies seeking to bolster growth.
Kuroda said the central bank works on policies while the Japanese government decides on fiscal policy, effectively separating two entities.
Nobel laureate Milton Friedman came up with this concept in 1969. The idea stipulates a central bank can buy debt directly to the government for newly released money which has been incorporated into the country through spending programs or tax reductions.
The material has been provided by InstaForex Company – www.instaforex.com