The Bank of Japan's policies over the last 14 months are a welcome return to sanity. Mainstream economists inside and outside Japan had been asking the BOJ to stand up against deflation for nearly two decades.
Under Gov. Haruhiko Kuroda's leadership, there are three important improvements that the BOJ has made to its monetary regime. It is not just about the specific targets and tools pursued -- a new monetary regime is one that creates a larger set of expectations about policy that ripple through to price- and wage-setting decisions in the entire economy.
