1996 Fiscal Year Final Research Report Summary
New Keynesian Theory and Its Application to the Japanese Economy
| Project/Area Number |
07630006
|
|---|
| Research Category |
Grant-in-Aid for Scientific Research (C)
|
| Allocation Type | Single-year Grants |
|---|
| Section | 一般 |
|---|
| Research Field |
経済理論
|
|---|
| Research Institution | The Institute of Economic Research, Hitotsubashi University |
|---|
Principal Investigator |
MIYAGAWA Tsutomu The Institute of Economic Research, Hitotsubashi University, Associate Professor, 経済研究所, 助教授 (30272777)
|
|---|
| Co-Investigator(Kenkyū-buntansha) |
FUKUDA Shin-ichi Faculty of Economics, University of Tokyo, Associate Professor, 経済学部, 助教授 (00221531)
FUKAO Kyoji The Institute of Economic Research, Hitotsubashi University, Associate Professor, 経済研究所, 助教授 (30173305)
ASAKO Kazumi The Institute of Economic Research, Hitotsubashi University, Professor, 経済研究所, 教授 (60134194)
|
|---|
| Project Period (FY) |
1995 – 1996
|
| Keywords | new Keynesian economics / sticky price / transmission mechanism / interest future / globalization / foreign direct investment / country risk / invoice currency |
|---|
| Research Abstract |
The purpose of this research is to understand recent macroeconomic movements of the Japanese economy based on new Keynesian economics. Departing from the assumption of sticky prices, new Keynesian economics proposes an analytical framework with price volatilities. This framework is useful for studying the Japanese economy in the 1990s where stock prices and land prices fell sharply and exchange rate fluctuated.
Miyagawa focused on investment behavior which was a key factor of Keynesian economics. Writing a survey of investment theory and its empirical analyzes, he studied comovements of investment between industries.
Sharp drop in stock and land prices damaged a financial system and effects of monetary policy and balance sheet shock in a banking sector have changed. Miyagawa examined transmission mechanism of monetary policy and negative shock in a banking sector. Asako studied effects of monetary policy on prices of interest futures.
Globalization is an important feature of the Japanese economy in the 1990. Fukao focused on which factors are crucial for selecting a country when Japanese firms carried out foreign direct investment. His empirical analysis showed that labor cost and country risk are crucial factors for foreign direct investment. Fukuda examined why the Japanese yen did not play a role of invoice currency in spite of the globalization of Japanese firms.
|
