Comment on "Great Inflation and Central Bank Independence in Japan"

Frederic Mishkin comments on Takatoshi Ito's chapter "Great Inflation and Central Bank Independence in Japan," expressing doubt that the Bank of Japan achieved de facto independence in 1975. Rather, he sees the bank as continuously subordinated to government pressure throughout the period. What differed at the end of the 1970s was that the government favored tightening. He also posits that the Japanese experience demonstrates that if the central bank has credibility for low inflation that oil price shocks need not be inflationary.