How should central banks take into account movements in asset prices in the conduct of monetary policy? We provide an analysis to address this issue using a dynamic stochastic general equilibrium model incorporating both price rigidities and financial market imperfections. Our findings are...

This paper studies the consequences of a lack of common knowledge in the transmission of monetary policy by integrating the Woodford (2003a) imperfect common knowledge model with Taylor-Calvo staggered price-setting models. The average price set by monopolistically competitive firms depends on...

We empirically investigate the relationship between the Japanese general collateral (GC) repurchase agreement (repo) and uncollateralized call rates before, during, and emerging from the recent financial crisis. Unlike the US and many other countries, the Japanese GC repo rate has been higher...

In this paper, we calculate the potential output and the output gap using a Bayesian-estimated DSGE model of Japan's economy. The model is a two-sector growth model that takes into account growth rate shocks including investment-goods sector-specific technological progress. For bridging the gap...

In this paper, we assess the effects of fiscal policy in Japan using two dynamic stochastic general equilibrium (DSGE) models. One is a medium-scale DSGE model of Japan's economy ("M-JEM," Fueki et al., 2010) estimated using Bayesian techniques. The other is the IMF's multi-region "GIMF (Global...

In this paper, we estimate time-varying biases of technical change and their effects on productivity using econometric models of aggregate and industry-level technology in Japan. In our aggregate model, the bias of technical change for energy input was energy-saving in the 1980s but gradually...

This paper provides a brief explanation and a detailed documentation of the current version of the Quarterly Japanese Economic Model (Q-JEM), which has been developed and constantly updated since the mid-2000s at Research and Statistics Department, Bank of Japan. Q-JEM is a large-scale...