The consumer price inflation rate in Japan has been below zero since the mid-1990s. However, despite the presence of a substantial output gap, the rate of deflation has been much smaller than that observed in the United States during the Great Depression. Given this, doubts have been raised...

This paper develops a new scheme for improving an approximation method of a probability density function, which is inspired by the idea in the Hilbert space projection theorem. Moreover, we apply "Dykstra’s cyclic projections algorithm" for its implementation. Numerical examples for...

A new asymptotic expansion scheme for backward SDEs (BSDEs) is proposed. The perturbation parameter "ε" is introduced just to scale the forward stochastic variables within a BSDE. In contrast to the standard small-diffusion asymptotic expansion method, the dynamics of variables given by the...

In this paper, we extend the concept of rational-expectations equilibrium, from a traditional single-belief framework to a multi-belief one. In the traditional framework of single belief, agents are supposed to know the equilibrium price "correctly." We relax this requirement in the framework of...

Official price indexes, such as the CPI, are imperfect indicators of inflation calculated using ad hoc price formulae different from the theoretically well-founded inflation indexes favored by economists. This paper provides the first estimate of how accurately the CPI informs us about "true"...

This paper develops a new scheme for improving an approximation method of a probability density function, which is inspired by the idea in best approximation in an inner product space. Moreover, we applies "Dykstra's cyclic projections algorithm" for its implementation. Numerical examples for...

Understanding the mutual relationships between information flows and social activity in society today is one of the cornerstones of the social sciences. In financial economics, the key issue in this regard is understanding and quantifying how news of all possible types (geopolitical,...

The existence of optimal strategy in robust utility maximization is addressed when the utility function is finite on the entire real line. A delicate problem in this case is to find a "good definition" of admissible strategies to obtain an optimizer. Under certain assumptions, especially a...

This paper provides the optimal position management strategy for a market maker who has to face uncertain customer orders in an "illiquid" market, where the market maker’s continuous trading through a traditional exchange incurs stochastic linear price impacts. In addition, it is supposed...

Many observers describe the last 20 years of the Japanese economy as "the Two Lost Decades". Many also discuss the "bad loans" in the banking sector and the "insufficient"and "delayed" "disposal of the bad loans." They urge policies that will accelerate that disposition. Observers have also...