Research Areas & Themes ( 2019 ): 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 crises, tail risks in fiscal crises and economic growth, theories on asset bubbles, 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.
We also will hold a SWET conference (macro finance) in summer and an End of Year Macroeconomics Conference in late December.

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.).
Considerations on progress of artificial intelligence (AI) and its involvement with the market and society through deep learning, from the standpoint of inter-generational issues.
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 also will be conducted on 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
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Collaborator(s) Kozo UEDA (Waseda University), Jess DIAMOND (Hosei University), Tomoyoshi YABU (Keio 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) Research on price revision frequency and size using scanned data for Korea
19) Research on purchasing price differential by household using scanned data for Korea
20) Research on distribution of inflation rates by household using scanned data for Korea
21) Comparison of the price fluctuation mechanism between Japan and the US
22) Research on consumption disparity using T-Point card data
23) Research on the adherence property of rent
24) 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
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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 migratory 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) Applications of statistical machine learning to economic network analysis
8) Analysis of international company networks using a heterogeneous information network
9) Development of methods of analysis of a heterogeneous information network
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) Prediction of scandal news data using a heterogeneous information network
17) Development of a method of detecting stock bubbles
18) Analysis of corporate governance structures on a global scale
19) Research on the echo chamber formation process on SNS

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 At workshops, we are discussing and preparing 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 the 1910s and how each company's behavior was related to its attributes (e.g., productivity, wages, relationship with financial institutions).

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 More specifically, this project involves research on impacts of the relationship between companies and politicians on the corporate value, research on impacts of the changes in the political system from the Tokugawa era to the Meiji era on the political layer structure of society, and research on impacts of industrialization on functional income distribution and personal income distribution.

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

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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 are writing a paper on determinants and consequences of mergers the electricity industry.

Historical evaluation of the efficiency of the Japanese financial system

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Research Objective We will analyze, among other things, the impacts of banks on the efficiency of inter-regional fund allocation, and impacts of the central bank’s supply of liquidity on the financial system and industry, using data from pre-war Japan.
Project Overview We are writing two papers as part of the research on inter-regional fund allocation by banks. The paper on the central bank's supply of liquidity was presented in the conference held in the US last year.

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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