Distributional Effects of (Un)conventional Monetary Policy in Japan

This dissertation studies distributional effect of (un)conventional monetary policies on Japanese household and corporate finances. It puts a special focus on household saving(s) and household income. The dissertation consists of four independent essays. In the first essay “Low Interest Rate Policy and Savings Culture in Japan: Implications for Economic Policy” the change in the savings culture in Japan during more than 30 years of low, zero and negative interest rate policies is examined. It is shown how the Bank of Japan’s persistently loose monetary policy changed the household and corporate savings culture in Japan. The second essay “Japanese Monetary Policy and Determinants of Household Saving” analyzes determinants of the household saving rate in Japan between 1960 and 2019. It finds that the zero-interest rate policy and unconventional monetary policies of the Bank of Japan are associated with the decline in the Japanese household saving rate. In the third essay “Japanese Unconventional Monetary Policy and Household Saving” the impact of expansionary monetary policies on household saving in Japan between 1993 and 2017 is analyzed. It shows that monetary expansion is associated with a widening gap in the wealth distribution through an adverse effect on non-academic households. The fourth essay “The Effects of Unconventional Monetary Policy on Stock Markets and Household Incomes in Japan” studies the distributional effects of monetary policy on Japanese household incomes. It is shown that the Bank of Japan’s unconventional monetary policy has contributed to a widening gap in the income distribution through the portfolio channel