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On January 22nd, on Abe's jawboning, BOJ Governor Masaaki Shirakawa - relative to most other central bank heads an inflation hawk - agreed to implement a monetary policy more to Abe's liking.
Shiller contends that it is possible that the government and its regulators were excessively focused on preventing recession and deflation because they honestly saw the home price increases as continuing -- if at a reduced rate -- indefinitely, even if they were to implement a monetary policy that would feed the bubble (p. 48).
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Trying to implement a common monetary policy for the euro zone was always a tough task.
And Mr Fraga will have to implement a credible monetary policy based on an inflation target.The other, and perhaps bigger risk, is that Brazil's recession is more severe than the IMF expects.
"In order to implement a flexible monetary policy, to ensure the fluidity of the banking system, to ensure stable growth of credit and to demonstrate the positive role that monetary policy plays in the support of economic growth, the People's Bank of China has decided to make downward adjustments" in interest rates and reserve requirements, the central bank said.
The IMF worried about it turning from lukewarm to cold: there were "elevated downside risks" through contagion if the euro debt crisis intensifies.The ECB faces the tricky task of trying to implement a common monetary policy in a fragmented economic region.
The Bank of Japan announced on Tuesday that it "decided to implement a comprehensive monetary easing policy" which included both a reduction in the interest rate from 0.1% to "around 0 and 0.1%" and, more radically, examining the establishment of a Y5000 billion or $60 billion asset purchase program.
Despite positive results recorded through the relative stability in domestic prices, the Bank of Uganda has continued to implement a tight monetary policy.
They must implement a more expansionary monetary policy.
Just on Tuesday for instance, Japan said it was implementing a comprehensive monetary easing policy" which included cutting interest rates and looking into establishing a $60 billion asset purchase program, both moves which could lead to a weaker yen.
Our experience from the 1970s showed us that it's impossible to implement an overly expansionary monetary policy without causing inflation.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com