著者

斉藤 美彦

出版者

経済理論学会

雑誌

季刊経済理論 (ISSN:18825184)

巻号頁・発行日

vol.43, no.3, pp.15-26, 2006

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In fiscal 1965, the Japanese Government could not continue to balance the budget and started to issue government bonds. Gross debt of the national government grew rapidly following the first oil crisis. Consequently, Japanese banks and the Bank of Japan have greatly increased their holdings of government bonds. The Bank of Japan, in particular, has had to increase the amount of outright purchases of long-term government bonds since the introduction of the quantitative easing policy in March 2001. Recently, many market participants and economists argue that a largely treasury-only portfolio of central banks would be appropriate as the markets for government bonds are large and liquid. This paper first examines the course of this large increase in the outright purchase of government bonds by the Bank of Japan, and then looks at a popular belief that the issuance of central bank notes should be supported by long-term government bonds. In addition, the paper shows that this popular belief is premised on the specific historical condition of the fiscal deficit. The paper also looks at the relationship between orthodox monetary policies and the accumulation of government bonds. The paper does not follow the old argument that central banks should hold only gold, foreign exchange and real bills, rather, it contends that the main issue is the way contemporary capitalism, financial systems and monetary policies are analyzed. Japan's future fiscal condition will be severely affected by its ageing society and the apparently ever increasing strength of the Yen. Under such circumstances, the Bank of Japan is likely to be under pressure to maintain the price of long-term government bonds and thereby keep long term interest rates low. Such a policy is likely to affect central bank independence, a very dangerous prospect. Finally, this paper emphasizes that central bank notes are not supplied exogenously. Private sector banks supply money (deposits) endogenously and people obtain central bank notes by withdrawing deposits. The demand for central bank notes is a part of the total demand for monetary aggregates supplied by private sector banks. The relationship, therefore, between the accumulation of government bonds and the structure of balance sheets of central banks concerns the overall contemporary financial systems.