2009 Fiscal Year Final Research Report
A Comparative Analysis of the Japanese and U.S. Money Demand Functions under Financial Crisis
| Project/Area Number |
19730230
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| Research Category |
Grant-in-Aid for Young Scientists (B)
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| Allocation Type | Single-year Grants |
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| Research Field |
Public finance/Monetary economics
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| Research Institution | Konan University (2008-2009)
Kyoto Gakuen University (2007) |
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Principal Investigator |
NAKASHIMA Kiyotaka Konan University, 経済学部, 准教授 (00367939)
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| Project Period (FY) |
2007 – 2009
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| Keywords | 貨幣需要 / 低金利政策 / 流動性の罠 / ブーツストラップ |
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| Research Abstract |
This research agenda presents the following empirical findings. First, money demand curves with extremely high interest-rate semi-elasticity have been observed since the Bank of Japan started to guide overnight call rates below 0.5% in 1995. Second, consistent with a possible implication from interest-elastic money demand, nominal prices did not respond to changes in nominal money supply in the short-run under the low interest-rate policy. These results indicate that it is more reasonable to control business cycles by keeping nominal interest rates to some extent far from zero percent.
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