Budget Deficits and Inflation: A Theoretical and Empirical Survey

Japan's fiscal position is deteriorating continuously, and some argue that a debt write-off through managed inflation will be inevitable if public debt is to increase at the present pace. This article will first examine if inflation is an inevitable component of the attempt to solve the current government debt problem by looking at the history of debt reduction in other countries. Next, it will evaluate the economic theory on the interdependence between fiscal and monetary policies in light of the historical experience of inflation. In so doing, it finds that the gold standard imposed discipline on both fiscal and monetary policies while under the floating exchange rate regime budget institutions and the central bank system served as a guidepost to economic policy-making as an alternative to the gold standard. Based upon these theoretical historical and institutional findings, it will conclude by reflecting on the ways in which the experience of other countries can be useful for evaluating Japan's situation.

Money Demand near Zero Interest Rate: Evidence from Regional Data

Using Japanese regional data, we have obtained estimates of the income elasticity of demand deposits that are positive, have values that are close to one, and are statistically significantly different from zero, not only during the period of the low interest rate policy implemented after 1995 but also during the period of the "zero interest rate policy." The stable relationship obtained from regional data could provide useful information by which to judge the stability of the money demand function.

Twistors and Bi-Hermitian Surfaces of Non-K\"ahler Type

The aim of this work is to give a twistor presentation of recent results about bi-Hermitian metrics on compact complex surfaces with odd first Betti number

Bi-Hermitian metrics on Kato surfaces

We investigate bi-Hermitian metrics on compact complex surfaces with odd first Betti number producing new examples with connected anti-canonical divisor using the general construction of \cite{abd15}. The result is a complete classification for all \it unbranched \rm Kato surfaces and a classification up to logarithmic deformation for \it intermediate \rm surfaces.Comment: Major revision: we found a gap in the proof of Theorem 5.1 and withdrew it; a few Remarks adde

Index of Kato surfaces

The compact curves of an intermediate Kato surface $S$ form a basis of $H^2(S,\mathbb Q)$. We present a way to compute the associated rational coefficients of the first Chern class $c_1(S)$. We get in particular a simple geometric obstruction for $c_1(S)$ to be an integral class, or equivalently index$(S)=1$. We also find an expression for the exponents of the contracting germ of $S$ in terms of self-intersection numbers of the compact curves.Comment: 25 page

Nonstationary Time-Series Modeling versus Structural Equation Modeling: With an Application to Japanese Money Demand

The issues of identification, estimation, and statistical inferences of nonstationary time series and simultaneous equation models are reviewed. It is shown that prior information matters and the advantage of dichotomization of the traditional autoregressive distributed lag model into the long-run equilibrium relation and the short-run dynamic adjustment process as an empirical modeling device may be exaggerated. A Japanese money demand study is used to illustrate that a direct approach yields a more stable long-run and short-run relationship and has better predictive power than the approach of letting the data determine the long-run relationship and modeling the short-run dynamics as an adjustment of the deviation from its equilibrium position.

Policy Duration Effect under the Zero Interest Rate Policy in 1999-2000: Evidence from Japan's Money Market Data

This paper quantifies the policy duration effect of the zero interest rate policy implemented in Japan from February 1999 to August 2000. Our empirical analysis shows that the policy duration effect observed in Japanese financial markets emerged via the expectations channel on the future course of monetary policy actions, supplemented significantly by liquidity effects in the severe financial conditions. This finding leads to the policy implication that the effectiveness of the zero interest rate policy depends crucially on the financial and economic conditions.

The Big Mac Standard: A Statistical Illustration

We demonstrate a statistical procedure for selecting the most suitable empirical model to test an economic theory, using the example of the test for purchasing power parity based on the Big Mac Index. Our results show that supporting evidence for purchasing power parity, conditional on the Balassa-Samuelson effect, depends crucially on the selection of models, sample periods and economies used for estimations.Big Mac Index, Purchasing Power Parity, Panel Data

Fractality and degree correlations in scale-free networks

Fractal scale-free networks are empirically known to exhibit disassortative degree mixing. It is, however, not obvious whether a negative degree correlation between nearest neighbor nodes makes a scale-free network fractal. Here we examine the possibility that disassortativity in complex networks is the origin of fractality. To this end, maximally disassortative (MD) networks are prepared by rewiring edges while keeping the degree sequence of an initial uncorrelated scale-free network that is guaranteed to become fractal by rewiring edges. Our results show that most of MD networks with different topologies are not fractal, which demonstrates that disassortativity does not cause the fractal property of networks. In addition, we suggest that fractality of scale-free networks requires a long-range repulsive correlation in similar degrees.Comment: 9 pages, 7 figure