The Bank of Japan's monetary policy aims to boost inflation and differs from Modern Monetary Theory, according to a senior official at the International Monetary Fund.
"We do not consider Japan a case study in MMT," Odd Per Brekk, deputy director of the Asia and Pacific Department, said in an interview on the sidelines of IMF meetings in Washington on Friday. "The proponents of MMT advocate permanently supplying monetary supply, or money supply, to finance fiscal deficits and boost economic activity both under normal and adverse conditions. The way we see it, this does not characterize the current situation in Japan."
The BOJ's purchases of Japanese government bonds have reduced the financing cost for the government, but that's not the objective of the central bank's policy as it aims to achieve its 2 percent inflation target, Brekk said.