The last two years, 1997 and 1998, gave an interesting case study of the interplay between these different variables and the degree of forward-looking behavior in the making of monetary policy.
Sources: Kunio Okina and Shigenori Shiratsuka, “Asset Price Bubbles, Price Stability, and Monetary Policy: Japan's Experience,” IMES Discussion Paper 2001-E-16, Institute for Monetary and Economic Studies, Bank of Japan, 2001, Chart 7. 8. Suppose a central bank adopts dramatic easing actions way beyond “standard” or rulebased monetary policy at an early stage.