Imperfect Information, Limited Rationality and the Effects of Economic Policies: An Investigation by the Polyphenic Approach

2017 Fiscal Year Final Research Report

• Project/Area Number: 25380308
• Research Category: Grant-in-Aid for Scientific Research (C)
• Allocation Type: Multi-year Fund
• Section: 一般
• Research Field: Economic policy
• Research Institution: Nagasaki University
• Principal Investigator: KUDO Takeshi 長崎大学, 経済学部, 准教授 (70404316)
• Project Period (FY): 2013-04-01 – 2018-03-31
• Keywords: 最適金融政策 / コア・インフレーション / 不完全資本移動

Outline of Final Research Achievements

We employ a simple macroeconomic model and simulation to investigate the effect of monetary policy in response to the negative demand shock which cuts the equilibrium real interest rate in the imperfect international capital market. As the result of this analysis, we clarify that there is a trade-off between the price stability and the optimal allocation of international capital, and that slightly tighter monetary policy can be optimal under some economic conditions.
We also investigate alternative core-inflation indicators. As the result of our analysis, we clarify that the sticky-price index which is built on the basis of a new Keynesian model is superior to the general price index and the trimmed average price indices in the forecast of future inflation.

Free Research Field

経済政策