Unconventional monetary policy in practice: a comparison of 'Quantitative Easing' in Japan and the USA

Quantitative Easing (QE) has been widely used by major central banks in the recent economic and financial crisis that started in 2007. However, the Bank of Japan (BoJ) already applied QE between 2001 and 2006. This paper tries to examine the differences between BoJ-type QE and QE applied by the US central bank (Fed). It turns out that both approaches differ fundamentally from each other with respect to the main goals and the instruments used to achieve these goals. Thus, the primary aim of QE in Japan was fighting deflation, whereas the fed addressed mostly strains in the banking system.