We empirically analyze the effects of uncertainty on investment, by types of uncertainty and by properties of stochastic processes; that is, permanent and transitory components separated from economic variables. According to our results, based on Japanese economic data, we find significant...

Even though monetary policy has kept interest rates at historically low levels, the Japanese economy has experienced long lasting recessions since the 1990s. These recessions are commonly attributed to nominal interest rates coming up against the zero bound and to the delay in achieving...

The inflation rate in Japan has been decreasing since the beginning of the 1990s. Although weak domestic demand most probably explains a large part of the story of this deflationary trend, external factors such as the recent increase in the number of cheap imported goods, have played an...

Empirical studies in corporate finance have long been interested in the role of banks in reducing the costs of financial distress. The purpose of this paper is to investigate how various measures of bank health and how defaults of major trading partners affected the probability of bankruptcy...

After prolonged recessions, the Japanese economy finally recovered in the first half of the 2000s, and recorded sustained growth until summer 2007. The purpose of this paper is to examine, from both macro and micro perspectives, the role of international trade with China in the recovery of...

To analyze the relative price of nontradable to tradable goods, we build a two-country, two-sector dynamic open macro model that in based on consumers' intertemporal optimizing behavior. The model predicts that the relative price of nontradable goods depends on the cross-sectoral productivity...

Because a borrower often faces switching costs in dealing with individual banks, the financial health of any given bank might affect the borrower's cost of funds. These costs would be particularly large for firms that have close relationships with relatively few banks. The purpose of this paper...

We define downward price rigidity as the state in which the speed at which prices fall is slower than that in which they rise. Based on this definition, we examine the downward price rigidity of each item that constitutes the core CPI of Japan. That is, according to the results of fractional...

We construct Bayesian vector autoregressive (BVAR) models optimized by the Posterior Information Criterion (PIC), in which hyper-parameters are data-determined in the same way as the lag length and trend order. We also assess the performance of the selected models by one-step ahead forecasts...

Trade credit is one of the most important sources of short-term external finance for small firms. Previous literature has focused mainly on the substitution of bank loans for trade credit during monetary tightening among many firms, but in this paper we investigate the role of trade credit...