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Research Areas & Themes ( 2018 ): Economics

Research on economic theory

Project Leader
Project Member(s)  ・   ・   ・   ・   ・ 
Research Objective We will perform theoretical studies on the following subjects:
analysis of long-term economic slumps after financial crises, theoretical analysis of non-performing loans, monetary theories and banking crises, tail risks in fiscal crises and economic growth, etc.
Project Overview We will analyze the subjects mainly using theoretical modeling and computer simulations. The results will be presented at academic conferences and seminars in Japan and abroad, and published in academic journals. We will host an annual CIGS Conference on Macroeconomic Theory and Policy to foster research-related exchanges with researchers from abroad.

Research on fiscal and inter-generational issues

Project Leader
Project Member(s)
Collaborator(s) Motohiro SATO(Professor, Hitotsubashi University), Yohei KOBAYASHI(Senior Analyst, Mitsubishi UFJ Research & Consulting Co.,Ltd.)
Research Objective Comprehensive analysis from various viewpoints, including perspectives on political philosophy, will be performed on policy measures taken in the event of a fiscal crisis and on countermeasures for extra long-term policy issues across generations (fiscal sustainability, social security sustainability, climate change, etc.).
Project Overview Workshops and other events will be held about once a month to exchange information and foster networking among researchers.

Research on capital market reform, etc.

Project Leader
Research Objective To increase productivity and drive economic growth in Japan, we will study new forms of equity governance (governance by shareholders) and how to reform the capital market to establish such equity governance.
In relation to this, we will examine the current situation where assets of elderly people with weakened cognitive functions are not effectively used as risk money, and search for ways to manage elderly people's assets fairly and efficiently, and to reform related systems.
Extensive studies will also be conducted on new business models for regionally based companies that capture local public needs, and opportunities to apply FinTech and AI to the capital market.
Project Overview Workshops with capital market experts and other intellectuals will be held about once a month to exchange information and foster research networking.

Research on fluctuations in product and real estate prices

Project Leader
Project Member(s)  ・   ・   ・ 
Collaborator(s) Kozo UEDA (Waseda University), Jess DIAMOND (Hosei University)
Research Objective We will elucidate the mechanisms by which product prices (prices of food, miscellaneous goods, durable appliances, etc.) and real estate prices (condominium sale prices, rent, etc.) fluctuate. Unlike past research, this research does not use aggregated price data, but instead uses the prices of individual products and real estate properties. Along with clarifying the characteristics of individual price fluctuations, we will uncover the mechanisms by which their aggregates (consumer price indexes and real estate price indexes) fluctuate. In more specific terms, we aim to clarify the mechanisms of consumer price index fluctuations (inflation and deflation), real estate bubbles, etc.
Project Overview 1) Development of living cost indices that consider product metabolism
2) Modeling of corporate R&D and price setting behavior, taking into consideration temporary demands for newly introduced products
3) Research on price prediction formation processes
4) Research on exchange rate pass-through using scanned data
5) Research on expected inflation and price rigidity based on multinational comparisons of analysis of the distribution of price percentage changes
6) Research on household purchasing and corporate price setting in response to macroeconomic shocks
7) Research on the impact of company-specific shocks on macro prices
8) A unified understanding of difference in rigidity between individual consumer good prices and price indices
9) Price connections based on alternative/complementary relationships between goods and their impact on price index rigidity
10) Development of methods to remove chain drifts
11) Development of living cost indexes involving the presence of durable goods
12) Research on purchasing price by income and age
13) Research on price index rigidity observed from the distribution of percentage changes in sales and price
14) Research on the relationship between company-specific prices and company-specific labor cost based on scanned data
15) Research on price revision frequency using scanned data for China
16) Research on price revision frequency using scanned data for the US
17) Research on Japan and China's purchasing power parity using scanned data for China
18) Comparison of the price fluctuation mechanism between Japan and the US
19) Research on consumption disparity using T-Point card data
20) Research on wage indices using job search site data
21) Research on the adherence property of rent
22) Analysis of the impact that location of stores and facilities has on their real estate price

Economic analysis using large-scale business data

Project Leader
Project Member(s)  ・   ・   ・   ・ 
Collaborator(s) Aki-Hiro SATO(Kyoto University), Shouji FUJIMOTO(Kanazawa Gakuin University)
Research Objective We will collect large-scale business data and elucidate the mechanisms behind the economic behavior of businesses, financial institutions, households, government, etc. Specifically, the subjects of our analysis include economic networks (business-to-business and trade), demographics and asset value fluctuations.
Project Overview 1) Research on the geographical distribution of social infrastructure (retail stores, schools, hospitals, public shelters, etc.) in communities
2) Estimation of the spatial distribution of populations with different attributes (where people with given attributes are, and when)
3) Research on scaling laws for population, the number of stores, and the number of facilities
4) Research on the relationship between people's travel behavior and local communities based on the position information obtained from mobile terminals
5) Microanalysis of the clustering process of stores and facilities
6) Development of a method to quantify geographical distribution differences efficiently and accurately
7) Application of matrix factorization to economic network analysis
8) Analysis of international corporate networks based on massive graph databases
9) Development of a method to analyze massive graph databases through back-pass searches
10) Analysis of Japan-US trade based on customs data
11) Construction of a statistical model that can predict the strength and content of network links
12) Research on trade network
13) Research on trilateral trade relations
14) Research on sound global flows of goods and money
15) Research on changes in people's behavior induced by incidents
16) Analysis of ESG investments based on large shareholding reports and data on corporate scandal news
17) Development of a method of detecting stock bubbles
18) Research on wages and labor demand and supply based on employment statistics

Internationalization of firms in the industry life cycle

Project Leader
Collaborator(s) Daisuke MIYAKAWA(Associate Professor, ICS, Hitotsubashi Univ.), Serguey BRAGUINSKY(University of Maryland)
Research Objective Many theoretical and demonstrative studies have been conducted since the late 2000s in fields such as international economics and industrial organization, on how the internationalization of firms’ activities (e.g., through exports and foreign direct investments) is related to their attributes and how it affects corporate performance (Mayer and Ottaviano, 2008; Wakasugi et al., 2008; etc.). These studies confirmed that in many countries only a fraction of firms engage in export and foreign direct investment. These studies also found mixed results regarding the effects of export and foreign direct investment on corporate performance. Unlike former studies, which focused primarily on panel data on firms over the past decade or so in developed countries, our research will examine the Japanese textile industry in the late 19th to early 20th centuries to identify how firms’ internationalization of activities is related to their attributes and how it affects their performance. This is expected to enable us to evaluate internationalization of the industry throughout its life cycle.
Project Overview Up until this fiscal year, the project has been drafting a paper on how individual spinning companies revised their selling prices in the Chinese market (their export destination) in response to changes in the exchange rate in the 1890s to 1910s and how each company's behavior was related to its attributes (e.g., productivity, wages, relationship with financial institutions).
This paper will be submitted to a journal sometime in FY 2018.

Japan's economic development and political/social changes

Project Leader
Collaborator(s) Michiru SAWADA(Nihon University), Tomoko MATSUMOTO(Nagoya University)
Research Objective The aim of the project is to analyze and understand quantitatively, based on micro-data, what kind of political and social background was behind Japan's long-term economic development since prewar days, and how the economic development in turn influenced Japan's political and social structures.
Project Overview For this research, we will systematically gather information on attributes of major figures in the economic and political circles (executives of leading firms, Imperial Diet members, nobility, etc.), find human networks among them, and analyze economic/political implications of these attributes and human networks. We submitted a paper to a journal in FY 2017. We plan to write a new paper on this project and present it at academic societies in Japan and elsewhere during FY 2018.

Corporate dynamics, business-to-business networks and productivity in the energy industry

Project Leader
Project Member(s)  ・ 
Research Objective A stable supply of energy, especially that of electricity at low cost, is a fundamental requirement for economic growth in the 20th century and beyond. Japan’s electric power industry began its development in the early 20th century, driven by many dispersed companies, and has grown into a large network through mergers and business-to-business partnerships. This project analyzes the expansion mechanism of this network and its implications, based on micro-data.
Project Overview We will write a paper on this project in FY 2018.

Historical evaluation of the efficiency of the Japanese financial system

Project Leader
Project Member(s)  ・ 
Research Objective This project is an extension of a project titled "Efficiency of inter-regional fund allocation through bank systems," which continued until FY 2017. Our study aims to verify the efficiency of financial systems from wider perspectives, including the financial system for central bank intervention in the financial market and implications to industries, in addition to the previously addressed topic of inter-regional funds allocation.
Project Overview While continuing research on the efficiency of inter-regional fund allocation for the time being, we will investigate implications of the central bank's lender-of-last-resort policy by examining the effects of market interventions performed by the Bank of Japan through special accommodation or other means in prewar days. We will write a paper on this project and present it at academic societies in Japan and elsewhere during FY 2018.

Innovation and innovation policies in Japan

Project Leader
Collaborator(s) Research Director Tetsuji OKAZAKI, Yukiko SAITO(The Research Institute of Economy, Trade and Industry), Hiroyasu INOUE(University of Hyogo)
Research Objective There is no doubt that innovation is essential to the sustained growth of the Japanese economy. This project aims to build long-term micro data on patents and analyze it to find mechanisms by which innovations are created, and to determine the effects of government policies on innovation.
Project Overview We will build long-term micro data on patents that cover prewar times to the present, and pursue the above objective in cooperation with researchers in spatial economics, network science and economic history.

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