Bolder economic policy could have addressed the persistent bouts of deflation in post-bubble Japan, claims this text. Despite warnings from economists, intense political pressure, and unconventional policy options to address this problem, Japan's central bank, the Bank of Japan (BOJ), resisted taking the bold actions that this work claims would have significantly helped. With Prime Minister Abe Shinzo's return to power, Japan finally shifted course at the start of 2013 with the launch of Abenomics - an economic agenda to reflate the economy - and Abe's appointment of new leadership at the BOJ. The BOJ's resistance to experimenting with bolder policy stemmed from entrenched policy ideas that were hostile to activist monetary policy. The text explains how these policy ideas evolved over the course of the BOJ's long history and gained dominance because of the closed nature of the broader policy network.

Previously issued in print: 2018.