Who killed the Japanese money multiplier? A micro-data analysis of banks

This paper investigates causes of the recent sharp decline in the money multiplier in Japan from the bank side. Two candidates for the cause are examined: the first is the worsening of the banks’ financial soundness, and the second is the zero interest rate policy. Using panel data of banks’ balance sheets, it is shown that both can contribute to a decline in the responsiveness of loans to a base money expansion. Quantitatively, the low interest rate is the more important among the twomoney multiplier, panel data, banking, bad loans, zero interest rate

Building a new framework for analyzing effects of Japanese shocks on Asia

This paper is a first step toward building a new macroeconomic model that is usable for analyzing the effects of shocks that originate in Japan on Asian economies. The new framework borrows its central ingredients from the literature of the “new open economy macroeconomicsâ€, that is characterized by explicit dynamic optimization, short-run nominal rigidity, and imperfect substitution between products. The last feature of this approach enables us to analyze how the trade structure between countries influences international transmission of shocks. This paper builds a three-country model, where the three countries are Asia, Japan, and US, which reflects trade and production patterns between them. Thus, the model is expected to yield more realistic predictions about how policy and productivity shocks in Japan affect Asian economies, both in the short and the long runsnew open macroeconomics, three country model, monetary policy, international transmission

Symmetry of n-mode positive solutions for two-dimensional H\'enon type systems

We provide a symmetry result for n-mode positive solutions of a general class of semi-linear elliptic systems under cooperative conditions on the nonlinearities. Moreover, we apply the result to a class of H\'enon systems and provide the existence of multiple n-mode positive solutions.Comment: 8 page

Bank Health Concerns, Low Interest Rates, and Money Demand: Evidence from the Public Opinion Survey on Household Financial Assets and Liabilities

This paper uses household survey data that cover the period from 2001 through 2003 to study the cash and deposits demand of households. These data enable us to obtain empirical findings that could not previously be derived through analyses using conventional macroeconomic time-series data. First, for asset demand, we find that the fluctuations in the extensive margin (the decisions on whether or not to hold a financial product) are sometimes more important than the fluctuations in the intensive margin (the decisions on the amounts of the financial product held). Second, we conduct detailed analyses on the causes of fluctuations in the cash demand of individual households. Third, thanks to qualitative questions in our dataset, we manage to distinguish between the fluctuations in asset demand due to low interest rates and those in response to various measures that are aimed at enhancing the safety of household savings. Fourth, we quantify the economic effects of personal financial education.Money demand; Low interest rates; Concern for the soundness of private financial institutions; Micro data; Self-selection bias; Personal financial education; Extensive margin; Intensive margin

"Monetary Policy and Economic Activity in Japan and the United States"

A cornerstone of monetary policy making is that a looser monetary policy is associated with lower interest rates, higher growth of narrow monetary aggregates, higher output and higher inflation. These responses, which we collectively refer to as the liquidity effect hypothesis, are at odds with some of the leading theoretical models of money. This paper proposes and implements a quasi-Bayesian methodology that allows us to compare the liquidity effect hypothesis with two other hypotheses: the sticky price hypothesis and the inflation tax hypothesis. Our results indicate that there is evidence against the liquidity effect hypothesis in U.S. data, but that a skeptical Bayesian decision maker would still assign most posterior weight it. For Japan, in contrast, even a skeptic would end up favoring the sticky price hypothesis.

Nonlocal problems at critical growth in contractible domains

We prove the existence of a positive solution for nonlocal problems involving the fractional Laplacian and a critical growth power nonlinearity when the equation is set in a suitable contractible domain.Comment: 17 page

Coron problem for fractional equations

We prove that the critical problem for the fractional Laplacian in an annular type domain admits a nontrivial solution provided that the inner hole is sufficiently small.Comment: 10 pages, revised versio

Monetary policy transmission in the EMS: A VAR approach

This paper analyzes monetary policy transmission in the European Monetary System using VAR techniques. After a discussion of several V AR identification procedures for the stance of monetary policy, this paper proposes an ¡identification scheme that is essentially consistent with the basic facts and does not have significant puzzles. The strategy is based on extracting the stance of monetary policy from the German system and using that structural shock in the VAR systems of other countries of the EMS. The results show that the stronger the commitment with the EMS discipline, the stronger the effect of the German monetary policy on the monetary policy of other EMS countries and the weaker the effect on the exchange rates. El documento analiza la transmisión de la política monetaria en el Sistema Monetario Europea usando técnicas de V AR (Vectores Autorregresivos). Tras discutir sobre varios procedimientos de V AR para la identificación de la situación de la política monetaria, se propone un esquema de identificación, el cual es esencialmente consistente con los hechos económicos. La estrategia está basada en extraer la situación de la política monetaria del sistema alemán y utilizar el "shock" estructural en los sistemas V AR de otros países del SME. Los resultados demuestran que a mayor compromiso con la disciplina del SME, más fuerte es el efecto de la política monetaria alemana en la política monetaria de otros países del SME y más débil el efecto sobre los tipos de cambio.Transmisión de política monetaria, vectores autorregresivos estructurales Monetary policy transmission, structural VAR