The Research Of Abenomics And Bank Of Japan's QE

Was Japan 's 20-year economic loss characterized by deflation and stagnation of economic growth? The debate on this issue has never stopped since the 1990 s.The Japanese government believes the long-term economic loss featured by deflation and stagnation of economic growth,and Abenomics appeared.Abnomics is a complete set of reforms in Japan in the past 20 years.It may be the "milestone" in Japanese economic reform.In order to make reader better understand the framework of Abenomics,this paper is divided into five parts.The first part of the article focuses on the mechanism of monetary policy,the validity of monetary policy,and the transmission mechanism of monetary policy spillover effect.The evaluation of Abenomics by economists is divided into three camps: query,support and criticism.The second part mainly introduces what Abenomics is,and analyses the so-called three "arrows" of Abenomics,including qualitative and quantitative monetary policy,mobile fiscal policy and economic growth strategy.The contents of "mobile fiscal policy" and "economic growth strategy" overlap with each other.The so-called "mobile fiscal policy" is to provide financial support for Japan's structural reform and to remove obstacles affecting the development of productive forces.In the paper of the third part,according to the definitions of regular monetary policy and discretionary monetary policy,the purchasing quantity of financial assets such as ETF,J-REIT,CP and corporate bonds would be expanded,short-term interest rate would be adjusted,long-term interest rate of treasury bonds would be depressed and enterprises and finance would be stabilized by adjusting the yield curve of Treasury bonds.The environmental policy of foreign exchange fund raising is categorized into discretionary monetary policy and regular monetary policy.According to different operational goals,this paper classifies Abenomics ' qualitative and quantitative easing monetary policy into two stages and studies the symmetry of Japan's regular monetary policy and discretionary monetary policy by means of the dynamic equation of output and monetary policy and uses VAR model to analyze the effect of Japan's regular monetary policy and discretionary monetary policy on output.This paper is going to clarify why the monetary policy,which is dominated by regular monetary policy and supplemented by discretionary monetary policy,has not solved the two major problems causing low economic growth rate and low inflation rate in Japan.The fourth part of the article puts forward the qualitative and quantitative financial easing "New Deal" of the Japanese monetary authority.This is the first adjustment of Bank of Japan's qualitative and quantitative easing monetary policy and it is a practical exploration.Japan's monetary authorities have failed in "additional easing" on many occasions.This adjustment gives us a refreshing sense of the framework,goals,characteristics and mode of operation of qualitative and quantitative easing monetary policy.This paper analyses the content and main characteristics of the qualitative and quantitative financial mitigation "New Deal" of Japanese monetary authority,the background of the implementation of the qualitative and quantitative financial mitigation "New Deal" by Japanese monetary authority,the challenges faced by the qualitative and quantitative financial easing "New Deal" of Japanese monetary authority and its future prospects.Japan's monetary authorities began to carry out the qualitative and quantitative easing monetary policy with controlling the long-term and short-term interest rate as the operational goal,which could not solve the shortcomings of the long-term qualitative and quantitative easing monetary policy implemented by Japan's monetary authorities with increasing the amount of monetary basic and could not solve the structural problems of Japan's economy.However,the "New Deal" focuses on playing a joint role with "fiscal policy" and "economic growth strategy".This shows that the Japanese monetary authorities have moved forward in the process of returning to the normal monetary policy of qualitative and quantitative easing.The fifth part of the article,through the analysis of the Japanese government's fiscal expenditure and tax revenue,can clearly find that the Japanese government adopted a neutral fiscal policy of expanding fiscal expenditure and financial reconstruction.Using the STR model to analyze the role of Japan's fiscal policy,we can clearly find that both government fiscal expansion and tax growth can drive the growth of domestic demand.According to the traditional economic theory,the growth of tax revenue and domestic demand show a reverse relationship,while Japan is due to the pre-consumption tax rush to increase the growth of tax revenue and domestic demand show a positive relationship.The contents of "fiscal policy" and "economic growth strategy" overlap with each other.The “fiscal policy” provides financial support for Japan's structural reform and to remove obstacles affecting economic growth.Fiscal expenditure policy is divided into 14 small aspects,and the role of government financial expenditure is analyzed.This paper summarizes Japan's tax reform as "Abenomics' Tax Reform",focusing on the content and impact of the tax reform which centered on the rise of Japanese consumption tax,the increasing of personal income tax and the decreasing of Japanese corporation tax.Finally,the relationship between the “fiscal policy" and the quantitative easing monetary policy of the Japanese monetary authority is analyzed.In the early stage,the fiscal policy mainly serves as the export of the quantitative easing monetary policy of the Japanese monetary authority.In the later stage,the interest rate of the long-term and short-term treasury bonds changes,which leads to the plight of the private financial institutions,but also reduces the risk of pension fund reduction.In the sixth part,the relevant theories of the spillover effects of qualitative and quantitative easing monetary policy in Japan are sorted out,and the mechanism of qualitative and quantitative easing monetary policy in Japan is theoretically analyzed by DSGE model.The reasons why the qualitative and quantitative easing monetary policy in Japan presents a "positive U-shaped curve" on Japan's foreign trade are explained.As well as the impact of the combination of qualitative monetary policy,quantitative easing monetary policy and negative interest rate policy on Japan's FDI.This paper establishes a VAR model,which includes two stages,and obtains the impulse response of Japan's base currency to China's GDP,China's price level,Japan's exports to China and Japan's FDI to China during the period throughout implementation of the qualitative and quantitative easing monetary policy with the operating goal of increasing the number of monetary base.And obtaining the impulse response of Japanese 10-year Treasury bonds to China's GDP,China's price level,Japan's exports to China and Japan's FDI to China during this period when implementing the qualitative and quantitative easing monetary policy with the operating the long-term and short-term interest rate of government bonds.Based on the "trade complementaries index" between China and Japan and the analysis of the stock overflow of R&D obtained from China's direct investment into Japan,which shows that Japan's exports to China strongly promote China's technological improvement.Compared with Japan's exports to China,the effect of international direct investment is weaker.According to the "ladder theory" of Japan's influence on China,its influence on China is mainly concentrated in the developed eastern provinces.Based on the provincial panel data of China's developed provinces from 2004 to 2014,using fixed-effect model and sys-GMM method,this paper studies the impact of Bank of Japan's qualitative and quantitative easing monetary policy on China's technological innovation through international trade and international direct investment.The results show that the impact from Japan of nine provinces on technological progress must be located the right side of the positive U-shaped curve.The international direct investment from Japan received by nine provinces has led to the negative coefficient of the impact of the amount of international direct investment received by nine provinces.