The inflation rate in Japan has been decreasing since the beginning of the 1990s. Although weak domestic demand most probably explains a large part of the story of this deflationary trend, external factors such as the recent increase in the number of cheap imported goods, have played an...

Since the mid-1990s, the asset portfolios of Japanese banks have continuously tilted toward government bonds, while lending to firms has declined. In this paper, we investigate the causes and consequences of such changes in banks' behavior by introducing banks' asset portfolio decision into an...

On 18-19 June 2004, the BIS held a conference on "Understanding Low Inflation and Deflation". This event brought together central bankers, academics and market practitioners to exchange views on this issue (see the conference programme in this document). This paper was presented at the workshop....