Research Areas & Themes ( 2017 ): Economics

Research on economic theory

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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 crisis, 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

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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 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 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, a shift from bank governance, the weakened corporate governance model led by banks, to equity governance (governance by shareholders) should take place. Our research focuses on capital market reform for establishing new 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.
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

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Collaborator(s) Hiroshi IYETOMI (Professor, Niigata 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 methods to remove chain drifts
2) Development of living cost indexes involving the presence of durable goods
3) Research on price prediction formation processes
4) Research on purchasing price by income and age
5) Research on price index rigidity observed from the distribution of percentage changes in sales and price
6) Research on the impact of company-specific shocks on macro prices
7) Development of a now-casting method for corporate financial closing, using scanned data
8) Research on exchange rate pass-through using scanned data
9) Research on price revision frequency using scanned data for China
10) Research on Japan and China's purchasing power parity using scanned data for China
11) Research on consumption disparity using T-Point card data
12) Research on wage indices using job search site data
13) Development of methods to calculate adequate real-estate prices based on machine learning techniques
14) Research on the influence of changes in population structure on real estate prices
15) Research on the adherence property of rent
16) Development of high-frequency rent indexes for Japan and Asia
17) Development of liquidity indexes for the real estate market

Economic analysis using large-scale business data

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Collaborator(s) Hiroshi IYETOMI (Professor, Niigata 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 how the spatial distribution of population (concentration in cities, while depopulation of local regions) changes as the population declines
2) Research on scaling laws for population, the number of stores, and the number of facilities
3) Research on geographical distribution of life-related infrastructure (retail stores, schools, hospitals, public shelters, etc.) in communities
4) Research on travel behavior of people based on Twitter data
5) Microanalysis of urban development and decline processes
6) Research on spatial distribution of population, employment and businesses
7) Research on the reconstruction of business-to-business transaction networks
8) Construction of a prediction model for network reconstruction dynamics through machine learning
9) Analysis of Japan-US trade based on customs data
10) Construction of a statistical model that can predict the strength and content of network links
11) Application of knowledge graphs to economic analysis
12) Research on the prediction of propagation of stock price shocks through business-to-business networks
13) Research on business-to-business networks by analyzing business-card exchange networks
14) Multilayer economic analysis based on business-card exchange network
15) Research on trade networks
16) Research on the global flow of speculative money
17) Research on triangular trade
18) Research on wages and labor demand and supply based on employment statistics
19)Development of a method of detecting stock bubbles

Internationalization of firms in the industry life cycle

Project Leader
Collaborator(s) Daisuke MIYAKAWA (Associate Professor, ICS, Hitotsubashi Univ.), Serguey BRAGUINSKY (Associate Professor, 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). During FY 2017, this paper will be presented at universities and academic societies in the US.
Aside from the above paper, we intend to approach this topic through research on changes in companies' productivity before and after their start of exports.

Japan's economic development and political/social changes

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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. 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.
Project Overview This project is an extension of the "Political connection and firm performance" project, which continued until FY 2016. Our paper on this project is under revision in response to a request made by an international journal in FY 2016 and will be resubmitted early in FY 2017.

Efficiency of inter-regional funds allocation through bank systems

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Project Member(s)
Research Objective A spatial analysis of economic development shows that the transfer of resources from low- to high-productivity regions is an essential element of economic development. By focusing on funds, this project measures, from long-term historic data, the size of such inter-regional transfers and verifies that these transfers took place from low- to high-productivity regions. From this perspective, we will evaluate the efficiency of the funds market in Japan’s economic development. This project is also pertinent to issues such as the regional division and integration of the financial market and the cause of the so-called lost two decades in Japan.
Project Overview We are writing a paper on the division and integration of regional financial markets in Japan based on long-term prefectural data through discussions in a study group. We made a presentation on this research during CIGS workshop at the end of FY 2016 and exchanged views.

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

Project Leader
Collaborator(s) Ken ONISHI (Assistant Professor, Singapore Management University)
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 Now that our data construction is almost complete, in FY 2017 we will write a paper on the integration of power frequency and network effects in the prewar period.

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