Potential output is the largest amount of products that can be produced by fully utilizing available labor and capital stock; the output gap is defined as the discrepancy between actual and potential output. If data on production factors contain measurement errors, total factor productivity...

We use the hyperbolic discounting model as the model that saving of each household varies in the steady state. In this model, there is a trade off that consumers will decrease future consumption and saving because of their temptation of current consumption. Therefore the degree of commitment...

In 1993, World Bank defined Hong Kong, Indonesia, Malaysia, Singapore, South Korea, Taiwan, Thailand as HPAEs (High-Performing Asian Economies). World Bank admired their high growth. In this paper, we evaluate the result of total package of their policy, Rapid Growth and Macroeconomic Stability....

As International Monetary Fund(2006) suggested, the inflation rate is less sensitive to business cycles in 1990s than before 1990s in the world. The so called "flattening Phillips curve" becomes the global phenomenon. If this phenomenon is dominant in the world, how does it affect the monetary...

Contingent capital (CC) is a bond that automatically converts into common stock when equity capital is impaired. This paper analyzes the determinants of the interest rate at which CC is issued and discusses the impacts of CC issuance on other financial markets. The paper shows that Japanese...

We construct a local Asian model, including the United States. We obtain structural parameters by estimation or calibration. We examine transmission of demand and exchange rate shocks over Asia and the United States. We also simulate the depreciation of Asian currencies beginning in 1997.

A new technique to estimate simultaneously the potential output and Phillips curve is demonstrated. Here we define the potential output as the non-accelerating-inflation level of output (NLO). The NLO is not a mere trend of the actual output, but rather is a critical level of output with the...

This paper shows how purchasing power parity (PPP) can be used to construct a measure for inflation expectations and discusses the properties of this measure from both a theoretical and an empirical perspective. Under the PPP hypothesis, inflation expectations in one country are equal to...

This paper demonstrates the time-varying NAIRU approach for estimation of the potential rate of growth, where the latter is defined as the growth rate at which the inflation rate would be neither accelerating nor decelerating. We show theoretically that this inflation-neutral potential rate of...