Papers - YOSHINO, Naoyuki

Finding stability in a time of prolonged crisis: Unconventional policy rules for Japan

Paul D. McNelis, Naoyuki Yoshino

JOURNAL OF FINANCIAL STABILITY (ELSEVIER SCIENCE INC)  27   122 - 136 2016.12

Joint Work, Accepted,  ISSN  1572-3089

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This paper develops and estimates a dynamic stochastic general equilibrium (DSGE) model representing several key characteristics of Japan, namely, a large open economy, with large fiscal deficits and increasing amounts of debt held by domestic residents, through recurring sets of adverse shocks to productivity and positiye shocks to government spending.
We compare optimal simple rules for consumption tax rates, a Taylor rule with negative interest rates, and a quantitative easing rule, for reducing government debt held by the banking system, as well as optimizing welfare. In times of crisis, we show that the QE policy rule outperforms optimally -derived simple tax-rate rules or Taylor rules with negative interest rates for mitigating the costs of post -crisis adjustment and debt overhang. (C) 2016 Elsevier B.V. All rights reserved.

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地域銀行の経営統合 : 課題と展望—特集 地銀のグループ経営

真鍋 雅史, 平賀 一希, 大庫 直樹, 吉野 直行

月刊金融ジャーナル (金融ジャーナル社)  57 ( 12 ) 8 - 13 2016.12

Joint Work,  ISSN  0453-9176

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Monetary Policy, Oil Prices and the Real Macroeconomic Variables: An Empirical Survey on China, Japan and the United States

Farhad Taghizadeh-Hesary, Naoyuki Yoshino

CHINA-AN INTERNATIONAL JOURNAL (NUS PRESS PTE LTD)  14 ( 4 ) 46 - 69 2016.11

Joint Work, Accepted,  ISSN  0219-7472

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This article examines the impact of US monetary policy as the world dominant monetary policy on the global crude oil prices and investigates the impact of oil price fluctuations on two real macro variables (gross domestic product [GDP] and inflation rate) of three global major crude oil consumers: the People's Republic of China (an emerging economy), and Japan and the United States (developed economies). To assess the relationship between monetary variables, crude oil prices and macro variables, the authors adopt an N-variable structural vector autoregression (SVAR) model. The results suggest that the monetary policy had a significant positive impact on oil prices during 2001-13 through two different channels (quantitative easing and exchange rate fluctuations). Also, the impact of oil price fluctuations on developed oil importers' GDP growth is much milder than on the GDP growth of an emerging economy. However, the impact on the China's inflation rate is found to be less severe compared to the two developed countries.

Exchange rate regime switching in Malaysia and Singapore in response to China's move to a basket peg: A DSGE analysis

Naoyuki Yoshino, Sahoko Kaji, Tamon Asonuma

JOURNAL OF ASIAN ECONOMICS (ELSEVIER SCIENCE BV)  46   17 - 37 2016.10

Joint Work, Accepted,  ISSN  1049-0078

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Motivated by the observation that when China broke from its US dollar peg in 2005, Malaysia and Singapore likewise loosened their currency ties to the US dollar, this paper considers how these two countries might best respond to a hypothetical transition by China to a new basket peg regime. We specify five alternative exchange rate strategies that encompass fixed, basket, and floating regimes and gradual versus sudden transitions. To project outcomes for macroeconomic variables under these alternative regimes, we apply a dynamic stochastic general equilibrium (DSGE) model of a small open economy and incorporate exogenous shocks as actually occurred from 2005 Q1 to 2014 Q4. We then compare the strategies based on values of a cumulative loss function defined on the output gap, the inflation rate, and the real effective exchange rate. The exercise reveals that a gradual adjustment to a basket peg with long-term optimal weights is the first-best policy for both countries, where optimal weights are derived to minimize the loss function. Further, both a sudden shift to a basket peg with optimal weights and a sudden shift to a floating rate regime are superior to maintaining the dollar peg in Malaysia, but not to maintaining the existing basket peg in Singapore. (C) 2016 Published by Elsevier Inc.

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Dynamic effects of changes in the exchange rate system

Naoyuki Yoshino, Sahoko Kaji, Tamon Asonuma

Asian Development Review (MIT Press Journals)  33 ( 1 ) 111 - 161 2016.03

Joint Work, Accepted,  ISSN  0116-1105

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We propose a new dynamic transition analysis on the basis of a small open economy dynamic stochastic general equilibrium model. Our proposed analysis differs from existing static and conventional dynamic analyses in that shifts from a fixed exchange rate regime to a basket peg or a floating regime are explicitly explored.We apply quantitative analysis, using data from the People’s Republic of China and Thailand, and find that both economieswould be better off shifting from a dollar peg to a basket peg or a floating regime over the long run. Furthermore, the longer the transition period, the greater the benefits of shifting to a basket peg regime from a dollar peg regime owing to limited volatility in interest rates. Regarding sudden shifts to a desired regime, the welfare gains are larger under a shift to a basket peg if the exchange rate fluctuates significantly.

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Why is financial education needed in Asia?

Naoyuki Yoshino, Peter J. Morgan, Ganeshan Wignaraja

Promoting Better Lifetime Planning through Financial Education (World Scientific Publishing Co. Pte. Ltd.)     20 - 30 2016.03

Joint Work, Accepted

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Promoting better lifetime planning through financial education

Naoyuki Yoshino, Flore-Anne Messy, Peter J. Morgan

Promoting Better Lifetime Planning through Financial Education (World Scientific Publishing Co. Pte. Ltd.)     1 - 205 2016.03

Joint Work

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Surveys show that financial literacy levels are typically low around the world, despite the widening access to financial services and the increasing financial risks borne by households in many countries. This suggests that there will be mounting challenges for households and SMEs to invest wisely and effectively as societies age and governments shift away from defined benefit to defined contribution pension schemes. Individuals will increasingly have to make complex financial decisions to plan for their retirement and for a range of foreseen and unforeseen expenditures. All of these developments suggest that financial education should be part of a lifetime process that starts at an early age and is pursued throughout adulthood. The contributions in this book came from a symposium titled, Promoting Better Lifetime Planning through Financial Education, organized by the Asian Development Bank Institute, the Bank of Japan, the Japan Financial Services Agency, and the Organisation for Economic Co-operation and Development, held on 22-23 January 2015 in Tokyo. Amongst the topics discussed were: effective pension management, financial education curricula in schools, training for teachers of financial education, internationally comparable data on financial literacy and the evaluation of the effectiveness of financial education programs. There are also case studies on financial inclusion, regulation, and education in Indonesia, Pakistan, Philippines, Viet Nam, Thailand, and Japan.

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Causes and Remedies of the Japan's Long-lasting Recession: Lessons for China

Naoyuki Yoshino, Farhad Taghizadeh-Hesary

CHINA & WORLD ECONOMY (WILEY-BLACKWELL)  24 ( 2 ) 23 - 47 2016.03

Joint Work, Accepted,  ISSN  1671-2234

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Japan has suffered from sluggish economic growth and recession since the early 1990s. In this paper, we analyze the causes of the prolonged slowdown of the Japanese economy (the lost decade). Economics Nobel laureate Paul Krugman has argued that Japan's lost decade is an example of a liquidity trap. However, our empirical analysis shows that stagnation of the Japanese economy comes from its vertical IS curve rather than a horizontal LM curve, so the Japanese economy has been facing structural problems rather than a temporary downturn. The vertical IS curve is caused by an insensitivity of investment to a lower interest rate partly because of the decline of sales due to the aging population and firms not wanting to invest. The structural problems come from the aging demographic, which is often neglected by scholars and policy-makers, and also from the allocation of transfers from the central government to local governments, and the unwillingness of Japanese banks to lend money to startup businesses and small and medium enterprises (SMEs), mainly because of Basel capital requirements. Many countries, like China, are expected to face similar issues, particularly given the aging population. The present paper will address why the Japanese economy has been trapped in a prolonged slowdown and provide some remedies for revitalizing the economy.

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地方創生・人口減少社会に対応する「ふるさと信託」 (信託経済コンファレンス 地方創生・人口減少社会に対応する信託)

吉野 直行

信託 (信託協会)   ( 265 ) 186 - 202 2016.02

Joint Work,  ISSN  0386-1368

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Response of macro variables of emerging and developed oil importers to oil price movements

Farhad Taghizadeh-Hesary, Naoyuki Yoshino, Majid Mohammadi Hossein Abadi, Rosa Farboudmanesh

JOURNAL OF THE ASIA PACIFIC ECONOMY (ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD)  21 ( 1 ) 91 - 102 2016.01

Joint Work, Accepted,  ISSN  1354-7860

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This paper assesses the impact of crude oil price movements on two macro variables, the gross domestic product (GDP) growth rate and consumer price index inflation rate, in the developed economies of the United States and Japan, and an emerging economy, the People's Republic of China (PRC). These countries were chosen for this research because they are the world's three largest oil consumers. The main objective of this study is to see whether these economies are still reactive to oil price movements. The results obtained suggest that the impact of oil price fluctuations on developed oil importers' GDP growth is much lower than on the GDP growth of an emerging economy. The main reasons for this lie in fuel substitution (higher use of nuclear energy, gas, and renewables), a declining population (for Japan), the shale gas revolution (for the United States), and strategic oil stocks and government-mandated energy efficiency targets in developed economies. All of these factors make developed economies more resistant to oil shocks. On the other hand, the impact of oil price movements on the PRC's inflation rate was found to be milder than in the two developed countries that were examined. The main cause for this is that the PRC experiences a larger forward shift in its aggregate supply due to higher growth, which allows it to avoid a massive increase in price levels following oil price shocks.

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Small and Medium-Sized Enterprise (SME) Credit Risk Analysis Using Bank Lending Data: An Analysis of Thai SMEs

Yoshino, N., Taghizadeh-Hesary, F., Charoensivakorn, P., Niraula, B.

Journal of Comparative Asian Development 15 ( 3 ) 383 - 406 2016

Joint Work, Accepted

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Appropriate Choice of Consumers in the Current and Future Life: From the Viewpoint of Consumer Education

Yoshino Naoyuki, Azuma Tamami

Journal of Household Economics (The Japan Society of Household Economics)  44   1 - 4 2016

Joint Work,  ISSN  1341-7347

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Discussing Financial Education: Purpose and Issues

Yoshino Naoyuki

Journal of Household Economics (The Japan Society of Household Economics)  44   5 - 10 2016

Joint Work,  ISSN  1341-7347

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日本共済協会業務研究会報告 アジアの経済・金融情勢と日本への示唆

吉野 直行

共済と保険 (共済保険研究会)  57 ( 12 ) 4 - 9 2015.12

Joint Work,  ISSN  2187-1795

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Adjustments of Capital Account Restrictions and Exchange Rate Regimes in East Asia

Naoyuki Yoshino, Sahoko Kaji, Tamon Asonuma

Journal of International Commerce, Economics and Policy (World Scientific Publishing Co. Pte Ltd)  6 ( 3 )  2015.10

Joint Work, Accepted,  ISSN  1793-9941

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This paper discusses adjustments of capital account restrictions and exchange rate regimes in East Asia. Monetary authorities have two options for these adjustments: Gradual adjustments and rapid adjustments. We analyze the costs and benefits for both adjustment options in each area, i.e., capital account restrictions and exchange rate regimes. The paper provides prominent country cases for each adjustment option to emphasize the benefits for policymakers. We then propose four transition policy options for East Asian countries aiming to relax capital account restrictions and increase flexibility in exchange rates from fixed regimes with capital account controls.

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インフラの経済効果の変化とそのファイナンス手法 (特集 社会インフラの再検討)

中東 雅樹, 吉野 直行

フィナンシャル・レビュー (財務省財務総合政策研究所 ; [1986]-)  2015 ( 4 ) 77 - 94 2015.10

Joint Work,  ISSN  0912-5892

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クラウドファンディングを活用した「ふるさと投資ファンド」

吉野 直行, 青山 直子

信託フォーラム = Shintaku forum (日本加除出版)  4   83 - 90 2015.09

Joint Work,  ISSN  2188-4773

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投資信託のさらなる普及に向けた費用体系を考える : 投資家、運用会社、販売会社のインセンティブが一致する仕組みが重要

吉野 直行, 青山 直子

金融財政事情 (金融財政事情研究会 ; [1950]-)  66 ( 33 ) 34 - 39 2015.08

Joint Work,  ISSN  1345-3033

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Dynamic Analysis of the Exchange Rate Regime: Policy Implications for Emerging Countries in East Asia

Naoyuki Yoshino, Sahoko Kaji, Tamon Asonuma

REVIEW OF DEVELOPMENT ECONOMICS (WILEY-BLACKWELL)  19 ( 3 ) 624 - 637 2015.08

Joint Work, Accepted,  ISSN  1363-6669

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This paper discusses exchange rate policies in East Asia. In particular, we explore whether actual policies that have been implemented by East Asian countries after the Asian Financial Crisis follow or deviate from theoretically desirable policies over the medium and long terms. On theoretical analysis, we show the relative superiority of a basket-peg regime with the basket weight rule when compared with a floating regime implementing the interest rate rule or money supply rule. For countries that currently adopt a fixed exchange rate regime, they would be better off shifting toward either a basket-peg or a floating regime over the medium term. A shift to a basket peg is more preferred when compared with a shift to a floating regime when the exchange rate fluctuations are large.

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アジア経済と信託の活用 (信託経済コンファレンス : わが国におけるエネルギーの課題と信託の活用可能性)

吉野 直行

信託 (信託協会)   ( 261 ) 111 - 131 2015.02

Joint Work,  ISSN  0386-1368

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