The Syndrome of the Ever-Higher Yen, 1971-1995: American Mercantile Pressure on Japanese Monetary Policy
This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Changes in Exchange Rates in Rapidly Development Countries: Theory, Practice, and Policy Issues (NBER-EASE volume 7) Volume Author/Editor: Takatoshi Ito and Anne O. Krueger, editors Volume Publisher: University of Chicago Press Volume ISBN: 0-226-38673-2 Volume URL: http://www.nber.org/books/ito_99-1 Publication Date: January 1999 Chapter Title: The Syndrome of the Ever-Higher Yen, 1971-1995: American Mercantile Pressure on Japanese Monetary Policy Chapter Author: Ronald McKinnon, Kenichi Ohno, Kazuko Shirono Chapter URL: http://www.nber.org/chapters/c8625 Chapter pages in book: (p. 341 - 376) 13 The Syndrome of the Ever- Higher Yen, 1971-1995: American Mercantile Pressure on Japanese Monetary Policy Ronald I. McKinnon, Kenichi Ohno, and Kazuko Shirono As defined by WebsterS Tenth New Collegiate Dictionary, a syndrome is 1: a group of signs and symptoms that occur together and characterize a particular abnormality; and, 2: a set of concurrent things (as emotions or actions) that usually form an identifiable pattern. From 1971, when the yen-dollar rate was 360, through Apiill995, when the rate briefly touched 80 (fig. 13.1), the interactions of the American and Japa- nese governments in their conduct of commercial, exchange rate, and monetary policies resulted in what we call “the syndrome of the ever-higher yen.” Our model of this syndrome is unusual because it links “real” considerations-that is, commercial policies, including threats of a trade war-with the monetary determination of the yen-dollar exchange rate and price levels in the two coun- tries.
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