2018 Fiscal Year Research-status Report
The effects of unconventional policies in the post-crisis era
| Project/Area Number |
18K01621
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| Research Institution | International Christian University |
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Principal Investigator |
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| Project Period (FY) |
2018-04-01 – 2021-03-31
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| Keywords | financial institutions / unconventional policy / monetary policy / transmission mechanism / credit channel / bank lending channel |
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| Outline of Annual Research Achievements |
Thus far, I have been able to complete collection of data on Japanese banks and Japanese unconventional monetary policy. Using a panel of bi-annual bank data covering the full universe of Japanese commercial banks over a fifteen-year period, I was able to conduct some empirical analysis of the effectiveness of quantitative easing policy on the bank lending channel of monetary policy transmission. Preliminary findings suggest that Japan’s unconventional monetary policy worked: there is a bank lending channel of monetary policy transmission in Japan. These results are robust to the inclusion of time fixed effects and generalized method of moments analysis. However, contrary to the predictions of banking theory, the effects of quantitative easing seem to come mostly through under-capitalized banks. These findings suggest that bank balance sheet problems and regulatory pressure continue to be important factors impairing the credit channel. These preliminary findings have been presented at several international economic conferences: the Southern Economic Association annual meetings, the Allied Social Science Association annual meetings and the Eastern Economic Association annual meetings. Those presentation opportunities prompted comments and feedback from other specialists working in the field. Those suggestions have been incorporated into the analysis. In addition to academic outlets, I have had the opportunity to give several media interviews, which is important for increasing public awareness of economic policy debates.
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| Current Status of Research Progress |
Current Status of Research Progress
3: Progress in research has been slightly delayed.
Reason
In 2018, I applied for an was awarded both a kaken-hi research grant and an Abe Foundation research fellowship. The Abe Foundation research fellowship is for research in the United States during the period September 22, 2018 until August 15, 2019. Since that period is my research sabbatical leave, I decided to focus on the Abe Foundation research fellowship project for those months. I am currently in the United States, visiting at the Carolina Asia Center of the University of North Carolina in Chapel Hill, North Carolina, conducting research for that grant. Since I have spend a lot of time on the Abe Foundation grant project during this period, my research on other projects is slightly delayed.
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| Strategy for Future Research Activity |
After the conclusion of my sabbatical and period of Abe Foundation research grant in August 2019 I will return my focus to my kaken-hi project research. At that time, I will pick up on my original plan to (1) expand the Japanese data set to three dimensional data that includes client firm - main bank matching and (2) collection of a comparable data set on US banks.
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| Causes of Carryover |
As explained above, completion of the research plan may still involve more collection of data on both US and Japanese firms and banks. In addition, preliminary results will be presented at overseas conferences for feedback and comments.
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