DOCSLIB.ORG

Optimal Monetary Policy When Interest Rates Are Bounded at Zero

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Optimal Monetary Policy When Interest Rates Are Bounded at Zero IMES DISCUSSION PAPER SERIES Optimal Monetary Policy When Interest Rates are Bounded at Zero Ryo KATO and Shin-Ichi NISHIYAMA Discussion Paper No. 2003-E-11 INSTITUTE FOR MONETARY AND ECONOMIC STUDIES BANK OF JAPAN C.P.O BOX 203 TOKYO 100-8630 JAPAN You can download this and other papers at the IMES Web site: http://www.imes.boj.or.jp Do not reprint or reproduce without permission. NOTE: IMES Discussion Paper Series is circulated in order to stimulate discussion and comments. Views expressed in Discussion Paper Series are those of authors and do not necessarily reflect those of the Bank of Japan or the Institute for Monetary and Economic Studies. IMES Discussion Paper Series 2003-E-11 October 2003 Optimal Monetary Policy When Interest Rates are Bounded at Zero Ryo KATO* and Shin-Ichi NISHIYAMA** Abstract This paper characterizes the optimal monetary policy reaction function in the presence of a zero lower bound on the nominal interest rate. We analytically prove and numerically show that the function is highly nonlinear, more expansionary, and more aggressive than the Taylor rule. We then test its empirical validity taking the case of Japan in the 1990s. Qualitatively, we find some evidence of nonlinear monetary policy. Quantitatively, we find the actual monetary policy to be too contractionary during the first half of the decade, while the low interest policy during the latter half turns out to be fairly consistent with the simulated path. Key words: Deflation, Liquidity trap, Pre-emptive monetary policy, Zero bound JEL classification: E52, E58, C63 * Global Economic Research Division, International Department, Bank of Japan (E-mail: [email protected]) ** Research Division 1, Institute for Monetary and Economic Studies, Bank of Japan (E-mail: [email protected]) This paper is a revised version of our earlier draft circulated as OSU Working Paper No.01- 12. We would like to thank Kosuke Aoki, Ken Brevoort, Steve Cecchetti, C.Y. Choi, Paul Evans, Bill Gavin, Takatoshi Ito, Andrew Levin, Nelson Mark, Satoshi Miyata, Masao Ogaki, Raphael Solomon, Dan Thornton, Takashi Ui, Nick Vriend, Tsutomu Watanabe, and four anonymous referees for their valuable comments. We thank Yasuo Hirose for providing us the data. We are especially grateful to Mario Miranda for his invaluable guide in building the numerical code. Any remaining errors are our own. The views expressed in this paper are those of the authors and do not necessarily reflect those of the Bank of Japan or the Institute for Monetary and Economic Studies. 4Lqwurgxfwlrq D }hur orzhu erxqg rq wkh qrplqdo lqwhuhvw udwh lv ehfrplqj d vhulrxv frqfhuq1 Pdq| fhqwudo edqnv/ hvshfldoo| lq lqgxvwuldol}hg frxqwulhv/ kdyh ehhq vxffhvvixo lq uhgxflqj dyhudjh lq dwlrq udwhv wr d udqjh ri 306(lq uhfhqw ghfdghv1 Lq wklv nlqg ri orz lq dwlrq hud/ hvshfldoo| zkhq d fhqwudo edqn lv idfhg e| d vhyhuh uhfhvvlrq/ d }hur orzhu erxqg rq wkh vkruw0whup qrplqdo lqwhuhvw udwh d srolf| lqvwuxphqw iru prvw ri wkh fhqwudo edqnv frxog eh d vhulrxv frqvwudlqw iru wkh lpsohphqwdwlrq ri prqhwdu| srolf|1 Lq wkh h{wuhph fdvh/ zkhq wkh qrplqdo lqwhuhvw udwh dfwxdoo| elqgv dw }hur/ d fhqwudo edqn zloo qr orqjhu eh deoh wr vwlpxodwh wkh hfrqrp| yld wkh qrplqdo lqwhuhvw udwh fkdqqho d skhqrphqrq dovr nqrzq dv d oltxlglw| wuds1 Lq vxfk flufxpvwdqfhv/ vwdqgdug prqhwdu| srolf|/ e| frqwuroolqj wkh vkruw0whup qrplqdo lqwhuhvw/ zloo ehfrph wrwdoo| lqhhfwlyh dqg wkh hfrqrp| zloo kdyh wr ehdu wkh frvw ri lqfuhdvhg yrodwlolw|1 Eolqghu +5333,/ ehlqj nhhqo| dzduh ri wklv suhglfdphqw/ vxfflqfwo| zduqv/ Grq*w jr wkhuh1 Wkh uhfhqw wuhqg ri orz lq dwlrq dffrpsdqlhg e| wkh lvvxhv vwhpplqj iurp d }hur orzhu erxqg lv wkh edvlf uhdvrq zk| lw lv ehfrplqj d uhdolvwlf dqg vhulrxv frqfhuq iru pdq| fhqwudo edqnv1 Uh hfwlqj wkh sudfwlfdo lpsruwdqfh ri d }hur orzhu erxqg rq wkh qrplqdo lqwhuhvw udwh/ pxfk uhvhdufk kdv ehhq pdgh uhjduglqj wkh frqgxfw ri prqhwdu| srolf| lq wkh suhvhqfh ri vxfk d frqvwudlqw1 Wkh slrqhhulqj zrun lv gxh wr Ixkuhu dqg Pdgljdq +4<<:,1 Wkh| frqgxfwhg dq lpsxovh uhvsrqvh dqdo|vlv wdnlqj lqwr dffrxqw ri wkh }hur orzhu erxqg dqg vkrzhg wkdw vwdelol}dwlrq srolf| lv frvwo| lq wkh vhqvh wkdw lw wdnhv orqjhu iru wkh rxwsxw dqg wkh lq dwlrq udwh wr uhwxuq wr d vwhdg| vwdwh wkdq wkh fdvh zkhuh wkhuh lv qr frqvwudlqw1 Ruskdqlghv dqg Zlhodqg +4<<;,/ lq wkhlu vwrfkdvwlf vlpxodwlrq vwxg|/ vkrzhg wkdw wkh suredelolw| ri wkh hfrqrplf vwdwh hqwhulqj d oltxlglw| wuds zloo eh orzhu zkhq wkh lq dwlrq wdujhw lv vhw kljkhu dqg frqfoxghg wkdw wkh vrfldo zhoiduh orvv fdq eh uhgxfhg e| vhwwlqj d srvlwlyh lq dwlrq wdujhw1 Uhlivfkqhlghu dqg Zlooldpv +5333, surylghg dq lqvljkwixo vwxg| zklfk vkrzv wkdw d yduldqw ri wkh Wd|oru uxoh lv vxshulru wr d vwdqgdug Wd|oru uxoh lq vwdelol}dwlrq fdsdelolw| e| frpsdulqj wkh h!flhqw srolf| iurqwlhu ri vwrfkdvwlf vlpxodwlrq uhvxowv1 Wklv lpsolhv wkdw zkhq wkh }hur orzhu erxqg rq wkh qrplqdo lqwhuhvw udwh lv lqfrusrudwhg/ wkh rswlpdo srolf| lv qhlwkhu d olqhdu ixqfwlrq ri vwdwh yduldeohv qru d vwdqgdug Wd|oru uxoh1 Ruskdqlghv dqg Zlhodqg +5333, ghprqvwudwhg wkdw wkh rswlpdo srolf| xqghu wkh qrq0qhjdwlylw| frqvwudlqw lv d qrqolqhdu ixqfwlrq ri wkh lq dwlrq udwh xvlqj d qxphulfdo phwkrg1 Wkhlu qxphulfdo hylghqfh vxjjhvwv d fhqwudo edqn wr dgrsw dq djjuhvvlyh prqhwdu| srolf| dv wkh qrplqdo lqwhuhvw udwh dssurdfkhv wkh }hur orzhu erxqg1 Zdwdqdeh +5333, dqg Mxqj hw do1 +5334, lqyhvwljdwhg wkh rswlpdo frqglwlrqv iru wkh whuplqdwlrq ri d }hur lqwhuhvw udwh srolf| edvhg rq wkh iruzdug0orrnlqj hfrqrp| prgho iroorzlqj Zrrgirug +4<<<,1 Xvlqj d vlpxodwlrq whfkqltxh/ wkh| vkrz wkdw wkh rswlpdo sdwk ri wkh qrplqdo lqwhuhvw udwh ghshqgv rq klvwrulfdo srolf| frqgxfw dv zhoo dv d frpplwphqw iru ixwxuh 4 srolf| frqgxfw14 Kxqw dqg Od{wrq +5336, lqyhvwljdwhg wkh uroh ri dq lq dwlrq wdujhw lq wkh suhvhqfh ri wkh }hur orzhu erxqg1 Xvlqj wkh PXOWLPRG vlpxodwlrq prgho/ wkh| vkrz wkdw wdujhwlqj wrr orz dq lq dwlrq udwh zloo lqgxfh d fhqwudo edqn wr eh vxvfhswleoh wr d gh dwlrqdu| vsludo dqg vxjjhvw wkdw wkh lq dwlrq udwh vkrxog eh wdujhwhg kljkhu wkdq 5(lq wkh orqj uxq1 Dprqj pxowlsoh dvshfwv ri wkh }hur erxqg sureohp/ rxu irfxv lv rq wkh h{solflw irup ri wkh rswlpdo prqhwdu| srolf| uhdfwlrq ixqfwlrq15 Wkh sdvw vwxglhv duh frpprqo| dzduh ri wkh ulvn ri wkh }hur orzhu erxqg +ru wkh oltxlglw| wuds,/ zklfk fdq vhulrxvo| dhfw wkh vwdelol}dwlrq ixqfwlrq ri wkh fhqwudo edqn1 Lq idfw/ prvw ri wkh sdvw vwxglhv/ vxfk dv Eolqghu +5333,/ Jrrgiulhqg +5333,/ Uhlivfkqhlghu dqg Zlooldpv +5333,/ Ruskdqlghv dqg Zlhodqg +5333,/ dqg Kxqw dqg Od{wrq +5336, srlqw rxw wkh srvvlelolw| wkdw wkh rswlpdo prqhwdu| srolf| lv dhfwhg e| wkh }hur orzhu erxqg ehiruh wkh frqvwudlqw dfwxdoo| elqgv1 Iru h{dpsoh/ Jrrgiulhqg +5333, fodlpv wkdw prqhwdu| srolf| pxvw eh suh0hpswlyh wr suhyhqw wkh frqvwudlqw iurp elqglqj1 Xqiruwxqdwho|/ krzhyhu/ wkh sdvw vwxglhv kdyh pdlqo| uholhg rq frqmhfwxuhv ru qxphulfdo2vlpxodwlrq phwkrgv lq vkrzlqj wklv suh0 hpswlyhqhvv ihdwxuh ri prqhwdu| srolf|1 Wkh pdlq frqwulexwlrq ri wklv sdshu lv wkdw zh surylgh d pdwkhpdwlfdo irxqgdwlrq wr wklv suh0hpswlyhqhvv ihdwxuh ri prqhwdu| srolf| lq wkh suhvhqfh ri wkh }hur orzhu erxqg1 Lq sduwlfxodu/ zh lqyhvwljdwh krz wkh rswlpdo prqhwdu| srolf| uhdfwlrq ixqf0 wlrq lv dhfwhg zkhq wkh }hur orzhu erxqg ri wkh qrplqdo lqwhuhvw udwh lv h{solflwo| lqfrusrudwhg wr d Vyhqvvrq +4<<:d, dqg Edoo +4<<<, w|sh prgho16 Edvhgrqwkhvw|o0 4 Iru pruh uhfhqw vwxglhv lq wkh frqwh{w ri iruzdug0orrnlqj sulydwh djhqwv/ vhh Ehqkdele hw do1 +5335, dqg Hjjhuwvvrq dqg Zrrgirug +5336,1 5 Dqrwkhu lpsruwdqw lvvxh vwhpplqj iurp wkh }hur orzhu erxqg frqvwudlqw lv wkh vr0fdoohg exhu uroh ri wkh lq dwlrq wdujhw1 Dv zdv uvw srlqwhg rxw e| Vxpphuv +4<<4,/ d fhqwudo edqn fdq suh0hpsw wkh ulvn ri ehlqj fdxjkw lq d oltxlglw| wuds e| wdujhwlqj d vpdoo exw srvlwlyh lq dwlrq udwh lq wkh orqj0uxq1 Krzhyhu/ wklv suh0hpswlrq vwudwhj| dvvxphv wkdw wkh lq dwlrq wdujhw +l1h1/ ZW, fdq eh frqwuroohg e| d fhqwudo edqn/ zklfk/ lq uhdolw|/ pd| qrw eh d uhdglo| dydlodeoh srolf| rswlrq lq wkh vkruw0uxq1 Lq wklv vhqvh/ wkh suh0hpswlrq vwudwhj| ri vhwwlqj d kljkhu lq dwlrq wdujhw fdq eh vdlg wr eh d srolf| rswlrq rqo| dydlodeoh lq wkh orqj0uxq1 Wklv sdshu glvfxvvhv wkh rswlpdo prqhwdu| srolf| uhdfwlrq edvhg rq wkh dvvxpswlrq ri d {hg lq dwlrq wdujhw/ dqg dqdo|}hv wkh vkruw0uxq suh0hpswlrq vwudwhj| lq d vlwxdwlrq zkhuh wkh qrplqdo lqwhuhvw udwh lv wkh vroh frqwuro yduldeoh ri d fhqwudo edqn1 D uhdghu ixuwkhu lqwhuhvwhg lq wkh orqj0uxq suh0hpswlrq vwudwhj| lq zklfk dq lq dwlrq wdujhw lv yduldeoh vkrxog uhihu wr Rukskdqlghv dqg Zlhodqg +4<<;,/ Kxqw dqg Od{wrq +5336, dqg Qlvkl|dpd +5336,1 6 Lq wkh devhqfh ri d }hur orzhu erxqg rq wkh qrplqdo lqwhuhvw udwh/ lw lv zhoo nqrzq wkdw wkh Wd|oru uxoh/ zklfk zdv uvw lqwurgxfhg lq d vhplqdo zrun e| Wd|oru +4<<6,/ fdq eh udwlrqdol}hg dv wkh rswlpdo srolf| uhdfwlrq ixqfwlrq ri d fhuwdlq fodvv ri d fhqwudo edqn*v g|qdplf rswlpl}dwlrq sureohp dv vkrzq lq Vyhqvvrq +4<<:d, dqg Edoo +4<<<,1 Zkhq d fhqwudo edqn*v orvv ixqfwlrq lv txdgudwlf dqg wkh hfrqrp| fdq eh fdswxuhg e| d uvw rughu glhuhqfh v|vwhp ri zklfk vwdwh yduldeohv duh wkh fxuuhqw rxwsxw dqg wkh lq dwlrq udwh/ wkh vroxwlrq ri wkh g|qdplf surjudpplqj sureohp lv d olqhdu ixqfwlrq ri wkh vwdwh yduldeohv/ wkdw lv/ wkh fxuuhqw rxwsxw dqg wkh lq dwlrq udwh1 Wklv lv wkh zhoo nqrzq surshuw| ri wkh vr fdoohg Olqhdu0Txdgudwlf +OT, uhjxodwru sureohp zkhq wkh frqwuro yduldeoh lv xqerxqghg/ zklfk kdv ehhq lqwhqvlyho| h{dplqhg erwk lq wkh hfrqrplfv dqg hqjlqhhulqj hogv ri vwxg|1 5 l}hg iudphzrun ri d fhqwudo edqn*v g|qdplf rswlpl}dwlrq sureohp iroorzlqj Vyhqvvrq
Load more

Recommended publications
  • On the Internationalization of the Japanese Yen
    This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Macroeconomic Linkage: Savings, Exchange Rates, and Capital Flows, NBER-EASE Volume 3 Volume Author/Editor: Takatoshi Ito and Anne Krueger, editors Volume Publisher: University of Chicago Press Volume ISBN: 0-226-38669-4 Volume URL: http://www.nber.org/books/ito_94-1 Conference Date: June 17-19, 1992 Publication Date: January 1994 Chapter Title: On the Internationalization of the Japanese Yen Chapter Author: Hiroo Taguchi Chapter URL: http://www.nber.org/chapters/c8538 Chapter pages in book: (p. 335 - 357) 13 On the Internationalization of the Japanese Yen Hiroo Taguchi The internationalization of the yen is a widely discussed topic, among not only economists but also journalists and even politicians. Although various ideas are discussed under this heading, three are the focus of attention: First, and the most narrow, is the use of yen by nonresidents. Second is the possibility of Asian economies forming an economic bloc with Japan and the yen at the center. Third, is the possibility that the yen could serve as a nominal anchor for Asian countries, resembling the role played by the deutsche mark in the Euro- pean Monetary System (EMS). Sections 13.1-13.3 of this paper try to give a broad overview of the key facts concerning the three topics, above. The remaining sections discuss the international role the yen could play, particularly in Asia. 13.1 The Yen as an Invoicing Currency Following the transition to a floating exchange rate regime, the percentage of Japan’s exports denominated in yen rose sharply in the early 1970s and con- tinued to rise to reach nearly 40 percent in the mid- 1980s, a level since main- tained (table 13.1).
    [Show full text]
  • Institutions, Competition, and Capital Market Integration in Japan
    NBER WORKING PAPER SERIES INSTITUTIONS, COMPETITION, AND CAPITAL MARKET INTEGRATION IN JAPAN Kris J. Mitchener Mari Ohnuki Working Paper 14090 http://www.nber.org/papers/w14090 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 June 2008 A version of this paper is forthcoming in the Journal of Economic History. We gratefully acknowledge the assistance of Ronald Choi, Jennifer Combs, Noriko Furuya, Keiko Suzuki, and Genna Tan for help in assembling the data. Mitchener would also like to thank the Institute for Monetary and Economic Studies at the Bank of Japan for its hospitality and generous research support while serving as a visiting scholar at the Institute in 2006, and the Dean Witter Foundation for additional financial support. We also thank conference participants at the BETA Workshop in Strasbourg, France and seminar participants at the Bank of Japan for comments and suggestions. The views presented in this paper are solely those of the authors, and do not necessarily represent those of the Bank of Japan, its staff, or the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer- reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications. © 2008 by Kris J. Mitchener and Mari Ohnuki. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. Institutions, Competition, and Capital Market Integration in Japan Kris J. Mitchener and Mari Ohnuki NBER Working Paper No.
    [Show full text]
  • Bank of Japan's Exchange-Traded Fund Purchases As An
    ADBI Working Paper Series BANK OF JAPAN’S EXCHANGE-TRADED FUND PURCHASES AS AN UNPRECEDENTED MONETARY EASING POLICY Sayuri Shirai No. 865 August 2018 Asian Development Bank Institute Sayuri Shirai is a professor of Keio University and a visiting scholar at the Asian Development Bank Institute. The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of ADBI, ADB, its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms. Working papers are subject to formal revision and correction before they are finalized and considered published. The Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI’s working papers reflect initial ideas on a topic and are posted online for discussion. Some working papers may develop into other forms of publication. Suggested citation: Shirai, S.2018.Bank of Japan’s Exchange-Traded Fund Purchases as an Unprecedented Monetary Easing Policy.ADBI Working Paper 865. Tokyo: Asian Development Bank Institute. Available: https://www.adb.org/publications/boj-exchange-traded-fund-purchases- unprecedented-monetary-easing-policy Please contact the authors for information about this paper. Email: [email protected] Asian Development Bank Institute Kasumigaseki Building, 8th Floor 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, Japan Tel: +81-3-3593-5500 Fax: +81-3-3593-5571 URL: www.adbi.org E-mail: [email protected] © 2018 Asian Development Bank Institute ADBI Working Paper 865 S.
    [Show full text]
  • The Causes of the Japanese Lost Decade: an Extension of Graduate Thesis
    The Causes of the Japanese Lost Decade: An Extension of Graduate Thesis 経済学研究科経済学専攻博士後期課程在学 荒 木 悠 Haruka Araki Table of Contents: Ⅰ．Introduction Ⅱ．The Bubble and Burst: the Rising Sun sets into the Lost Decade A．General Overview Ⅲ．Major Causes of the Bubble Burst A．Financial Deregulation B．Asset Price Deflation C．Non-Performing Loans D．Investment Ⅳ．Theoretical Background and Insight into the Japanese Experience Ⅴ．Conclusion Ⅰ．Introduction The “Lost Decade” – the country known as of the rising sun was not brimming with rays of hope during the 1990’s. Japan’s economy plummeted into stagnation after the bubble burst in 1991, entering into periods of near zero economic growth; an alarming change from its average 4.0 percent growth in the 1980’s. The amount of literature on the causes of the Japanese economic bubble burst is vast and its content ample, ranging from asset-price deflation, financial deregulation, deficient banking system, failing macroeconomic policies, etc. This paper, an overview of this writer’s graduate thesis, re-examines the post-bubble economy of Japan, an endeavor supported by additional past works coupled with original data analysis, beginning with a general overview of the Japanese economy during the bubble compared to after the burst. Several theories carried by some scholars were chosen as this paper attempts to relate the theory to the actuality of the Japanese experience during the lost decade. - 31 - Ⅱ．The Bubble and Burst: the Rising Sun to the Lost Decade A. General Overview The so-called Japanese “bubble economy” marked high economic growth. The 1973 period of high growth illustrated an average real growth rate of GDP/capita of close to 10 percent.
    [Show full text]
  • International Trading Companies: Building on the Japanese Model Robert W
    Northwestern Journal of International Law & Business Volume 4 Issue 2 Fall Fall 1982 International Trading Companies: Building on the Japanese Model Robert W. Dziubla Follow this and additional works at: http://scholarlycommons.law.northwestern.edu/njilb Part of the International Law Commons Recommended Citation Robert W. Dziubla, International Trading Companies: Building on the Japanese Model, 4 Nw. J. Int'l L. & Bus. 422 (1982) This Article is brought to you for free and open access by Northwestern University School of Law Scholarly Commons. It has been accepted for inclusion in Northwestern Journal of International Law & Business by an authorized administrator of Northwestern University School of Law Scholarly Commons. Northwestern Journal of International Law & Business International Trading Companies: Building On The Japanese Model Robert W. Dziubla* Passageof the Export Trading Company Act of 1982provides new op- portunitiesfor American business to organize and operate general trading companies. Afterpresenting a thorough history and description of the Japa- nese sogoshosha, Mr. Dziubla gives several compelling reasonsfor Ameri- cans to establish export trading companies. He also examines the changes in United States banking and antitrust laws that have resultedfrom passage of the act, and offers suggestionsfor draftingguidelines, rules, and regula- tionsfor the Export Trading Company Act. For several years, American legislators and businessmen have warned that if America is to balance its international trade-and in particular offset the cost of importing billions of dollars worth of oil- she must take concrete steps to increase her exporting capabilities., On October 8, 1982, the United States took just such a step when President Reagan signed into law the Export Trading Company Act of 1982,2 which provides for the development of international general trading companies similar to the ones used so successfully by the Japanese.
    [Show full text]
  • Title the Japanese Currency Policy and the British Banks in Asia In
    The Japanese Currency Policy and the British Banks in Asia in Title 1870s-1890s Author(s) MOTOYAMA, Yoshihico; YOKOYAMA, Shisei Citation The Kyoto University Economic Review (1995), 64(1): 1-8 Issue Date 1995-02 URL https://doi.org/10.11179/ker1926.64.1 Right Type Departmental Bulletin Paper Textversion publisher Kyoto University THE KYOTO UNIVERSITY ECONOMIC REVIEW MEMOIRS OFTHE FACULTY OF ECONOMICS KYOTO UNIVERSITY VOLUME LXIV NUMBER 1 (APRIL 1994) WHOLE NUMBER 136 The Japanese Currency Policy and the British Banks in Asia in 1870s - 1890s 牢 ( Yoshihiko MOTOYAMA'" and Shisei YOKOYAMA I The Silver Dollar and the Japanese Silver Yen in Asia before 1897 In Asia before l870s , Spanish silver dollars (including Mexican dollars) were the most familiar and influential import from the West. They were widely circulated in Asia from the sixteenth to the middle of the nineteenth century. But they were generally less favoured by most Asian Government , though they were made legal tender in Singapore in 1867. During the 1870s, the value of silver beｭ gan to depreciate. This meant the opening the “ T rade Dollar Era". Western countries began to mint and export silver trade dollars for circulation in silver-using countries. The Hong Kong dollar was minted in 1866, the US trade dollar in 1873, and the British dollar in 1895. They did so beｭ cause the value of silver in silver-using countries , particularly in China , were not depreciating at the same rate as it was in the Western Countries. So they wanted their own trade dollar to replace Mexｭ ican dollars in Asia.
    [Show full text]
  • Kirin Report 2016
    KIRIN REPORT 2016 REPORT KIRIN Kirin Holdings Company, Limited Kirin Holdings Company, KIRIN REPORT 2016 READY FOR A LEAP Toward Sustainable Growth through KIRIN’s CSV Kirin Holdings Company, Limited CONTENTS COVER STORY OUR VISION & STRENGTH 2 What is Kirin? OUR LEADERSHIP 4 This section introduces the Kirin Group’s OUR NEW DEVELOPMENTS 6 strengths, the fruits of the Group’s value creation efforts, and the essence of the Group’s results OUR ACHIEVEMENTS and CHALLENGES to OVERCOME 8 and issues in an easy-to-understand manner. Our Value Creation Process 10 Financial and Non-Financial Highlights 12 P. 2 SECTION 1 To Our Stakeholders 14 Kirin’s Philosophy and TOPICS: Initiatives for Creating Value in the Future 24 Long-Term Management Vision and Strategies Medium-Term Business Plan 26 This section explains the Kirin Group’s operating environment and the Group’s visions and strate- CSV Commitment 28 gies for sustained growth in that environment. CFO’s Message 32 Overview of the Kirin Group’s Business 34 P. 14 SECTION 2 Advantages of the Foundation as Demonstrated by Examples of Value Creation Kirin’s Foundation Revitalizing the Beer Market 47 Todofuken no Ichiban Shibori 36 for Value Creation A Better Green Tea This section explains Kirin’s three foundations, Renewing Nama-cha to Restore Its Popularity 38 which represent Group assets, and provides Next Step to Capture Overseas Market Growth examples of those foundations. Myanmar Brewery Limited 40 Marketing 42 Research & Development 44 P. 36 Supply Chain 46 SECTION 3 Participation in the United Nations Global Compact 48 Kirin’s ESG ESG Initiatives 49 This section introduces ESG activities, Human Resources including the corporate governance that —Valuable Resource Supporting Sustained Growth 50 supports value creation.
    [Show full text]
  • Working Paper No. 143
    The Productivity Effects of Human Resource Management Practices: Evidence from New Japanese Panel Data Takao Kate” Motohiro Morishima** Working Paper No. 143 June 1995 Correspondence: Takao Kato Department of Economics Colgate University, Hamilton, NY 13346 Phone: 315-824-7562 Fax: 315-824-7726 Internet: [email protected] *Associate Professor of Economics, Colgate University and Research Associate, The Jerome Levy Economics Institute **Associate Professor of Human Resource Management, Keio University ABSTRACT This paper uses new Japanese panel data to estimate the impact of various human resource management practices (HRMP’s) on productive efficiency. These include information sharing devices, such as joint labor-management committees(JLMC’s) and non-union employee associations (NUEA’s), and financial participation schemes, such as profit sharing plans(PSP’s) and employee stock ownership plans (ESOP’s). By merging data from a new survey concerning HRMP’s among publicly-held Japanese firms with two other public data sources, we create for the first time a enterprise-level panel data set for Japanese firms that provides information annually for 1970-85 on both information sharing and financial participation. The data are then used to estimate translog production functions augmented by variables to capture the effects of information sharing and financial participation. The estimations yield the first econometric evidence on the productivity effects of diverse HRMP’s in Japan. The key findings include: (i) there are significant productivity-enhancing effects for JLMC’s, NUEA’s, PSP’s and ESOP’s; (ii) these productivity gains will change as HRMP’s age. For instance, the introduction of a JLMC boosts productivity initially by 9 percent annually.
    [Show full text]
  • A History of the Bank of Japan, 1882-2016
    WINPEC Working Paper Series No.E1719 October 2017 A History of the Bank of Japan, 1882-2016 Masato Shizume Waseda INstitute of Political EConomy Waseda University Tokyo,Japan A History of the Bank of Japan, 1882-2016 Masato Shizume (Waseda University) 1. Introduction In this paper, we review the history of the Bank of Japan (BOJ) with a focus on the changing role of the central bank and the transformation of the national economy (Table 1). When Japan joined the modern world in the late 19th century as a country with a small and open economy, the Bank was created as an entity to integrate the national financial market and provide liquidity for economic growth. By the early 20th century, Japan had succeeded in joining the modern world and began pursuing its goal as an empire. Under this condition, the Bank played a pivotal role in financing wars and in stabilizing the less-disciplined national financial market. Yet during and after Japan’s losing war with its main trading partners in the 1930s and 1940s, the Bank was overwhelmed by ballooning government debt and rampant post-war inflation. When Japan re-focused its national goal on high economic growth during the 1960s and early 1970s, the Bank was revived as an engine to fuel liquidity into the national economy even without legal independence. Once the Japanese economy reached an advanced stage of development from the 1970s onward, the Bank’s main task changed from providing liquidity for economic growth to stabilizing the domestic economy. In pursuing its task, the Bank has often faced trade-offs between guns and butter, stability and growth, the threat of economic backlash and the moral hazard problem.
    [Show full text]
  • Why Was Japan Hit So Hard by the Global Financial Crisis?
    ADBI Working Paper Series Why was Japan Hit So Hard by the Global Financial Crisis? Masahiro Kawai and Shinji Takagi No. 153 October 2009 Asian Development Bank Institute ADBI Working Paper 153 Kawai and Takagi Masahiro Kawai is the dean of the Asian Development Bank Institute. Shinji Takagi is a professor, Graduate School of Economics, Osaka University, Osaka, Japan. This is a revised version of the paper presented at the Samuel Hsieh Memorial Conference, hosted by the Chung-Hua Institution for Economic Research, Taipei,China 9–10 July 2009. The authors are thankful to Ainslie Smith for her editorial work. The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of ADBI, the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms. The Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI’s working papers reflect initial ideas on a topic and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each working paper (given in the citation below). Some working papers may develop into other forms of publication. Suggested citation: Kawai, M., and S. Takagi. 2009. Why was Japan Hit So Hard by the Global Financial Crisis? ADBI Working Paper 153.
    [Show full text]
  • The Japanese Economy During the Interwar Period
    20092009--JE--21 The Japanese Economy during the Interwar Period: 両大戦間期Instabilityの日本における恐慌と政策対応 in the Financial System and ― 金融システム問題と世界恐慌への対応を中心にthe Impact of the World Depression ― Institute for Monetary and Economic Studies 金融研究所 鎮目雅人 Masato Shizume 2009 年 4 月 May 2009 The Japanese economy during the interwar period faced chronic crises. Among them, the Showa Financial Crisis of 1927 and the Showa Depression of 1930-31 marked turning points. The Showa Financial Crisis of 1927 was the consequence of persistent financial instability because of the incomplete restructuring in the business sector and postponements in the disposal of bad loans by financial institutions. The crisis brought reforms in the financial sector through large-scale injections of public funds and the amalgamation of banks. The Showa Depression of 1930-31 was caused by the Great Depression, a worldwide economic collapse, which had been intensified in Japan by the return to the Gold Standard at the old parity. Japan escaped from the Great Depression earlier than most other countries through a series of macroeconomic stimulus measures initiated by Korekiyo Takahashi, a veteran Finance Minister who resumed office in December 1931. Takahashi instituted comprehensive macroeconomic policy measures, including exchange rate, fiscal, and monetary adjustments. At the same time, the Gold Standard, which had been governing Japan’s fiscal policy, collapsed in the wake of the British departure from it in September 1931. Then, Japan introduced a mechanism by which the government could receive easy credit from the central bank without establishing other institutional measures to govern its fiscal policy. This course of events resulted in an eventual loss of fiscal discipline.
    [Show full text]
  • JAPAN Moving Toward a More Advanced Knowledge Economy
    WBI Development Studies VOLUME 1 37261 v 1 Public Disclosure Authorized JAPAN Moving Toward a More Advanced Knowledge Economy Public Disclosure Authorized Assessment and Lessons Public Disclosure Authorized Edited by Tsutomu Shibata Public Disclosure Authorized WBI DEVELOPMENT STUDIES Japan, Moving Toward a More Advanced Knowledge Economy Volume 1: Assessment and Lessons Edited by Tsutomu Shibata The World Bank Washington, D.C. © 2006 The International Bank for Reconstruction and Development/The World Bank 1818 H Street NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: [email protected] All rights reserved This volume is a product of the staff of the International Bank for Reconstruction and Development/The World Bank. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development/the World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www.copyright.com.
    [Show full text]