Japan in 70’s

: a speculative run on an interest rate peg?

Abstract

This thesis aims to present the Japanese Great Inflation of 1974 as a case study of the equilibria developed by Bassetto and Phelan (2015), identifying in a set of Japanese macroeconomic variables the mechanisms that characterise a corner equilibrium and its recovery. The theoretical framework of the authors is explained and discussed, a terse account of the Japanese markets and institutions is provided, and, finally, an analysis of the period between 1973-1975 is presented, concluding that there are strong similarities between the Japanese context and a corner equilibrium.

Date of Award	1 Feb 2024
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Pedro Teles (Supervisor)