After January 17th 1999, Mr.Greenwood. found many similar opinion in the publications.
Mr. G purchased his new book translated into Japanese, "The Accidental Theorist" (Library Serial No. 412). In this book, as means of increasing money supply, he suggested Central Bank of Japan should buy government bond.
Some politician started arguing an increase of direct buying operation of government bond by central bank. But this is forbidden by the law even in US and Germany.
This movement is a reaction to January 20th Financial Times article written by Prof. Krugman. and Mr. Robert E. Rubin, Secretary of US treasurer's question to the Japanese officer in Global Economic Forum held in Davos on the possibility of money supply. But both didn't mention direct buying or indirect buying from the market.
Now buying operation of government bond from the market is only 0.4 %/year of gross national saving amount. This figure is within actual money withdrawal from the city bank.
More report on the same issue shown up in the media. Most of the old people are against the idea of direct buying operation, because of the bad memory of uncontrolled inflation after the war. This inflation was caused by unlimited direct buying operation of the government bond during the war. Younger economist are more flexible and suggested such buying operation within the time frame and maximum amount limitation.
Mr. Sakaiya, Secretary of Economic Planning Board expressed his beliefs in TV that buying operation of government bond from the market is superior. Because this scheme can hear from the market.
A Prof. emeritus Yasuba of Osaka university expressed same opinion as Prof. Krugman in Nikkei Shinbun (paper). He says that buying operation of government bond from the market is not enough. Now, direct buying operation of the government bond is necessary.
Mr. Kato, former secretary of prime minister said that any bond buying cause inflation.
Retired high official of Economic Planning Board criticized direct buying operation of the government bond citing Joseph Schumpeter's word "Keynesian's policy is like morphine addiction".
Central Bank will have an important policy meeting in coming 12th. Mr. Sakaiya, Secretary of Economic Planning Board will attend. But he has no voting right.
Chairman of Businessman's Association and Chief officer of Finance Ministry expressed support on increase of buying operation of government bond from the market, but not on direct buying operation of the government bond.
Some of TV does not distinguish between buying operation of government bond from the market from direct buying operation of the government bond. The discussion is misleading. They should learn before commenting.
Central Bank Of Japan made a decision to lower short term interest rate from 0.25 % to 0.15 %. But they didn't adopt the policy of any government bond buying operation. They sticked in the independence from government policy.
Mr. Miyazawa, Minister of Finance stated that part of Long Term Government Bond will be shifted to Medium Range Government Bond and Government operated Savings Bank will buy Government Bond. The market responded favorably.
Prof. Krugman said that Bank of Japan's role is to create expectation for inflation. But most people misunderstand that he is suggesting buying government bond by Bank of Japan.
Finally, Bank of Japan kept zero interest rate over a year. But there is no sign of stopping deflation. Recent opinion of economists are split into two. Holder of Ph.D. degree of Tokyo university is supporting Bank of Japan's zero interest rate. Holder of Ph.D. degree of MIT, Harvard and others are supporting Prof. Krugman.
Prof. S. Saito of St. Paul University (Ph.D. of Tokyo Univ.) is supporting zero interest rate
Prof. Shimizu of Hitotubashi University (Ph.D. of Hitotsubashi Univ.) support creating expectation for inflation.
Assist. Prof. M. Shimizu of Osaka University (Ph.D. of MIT) and Assist. Prof. T. Watanabe of Hitotsubashi University (Ph.D. of Harvard) support creating expectation for inflation.