Naoyuki Yoshino

Monetary Policies and Oil Price Determination: An Empirical Analysis

While the oil price shocks of 1970s can be explained by pure supply factors, starting in the 1980s oil prices increasingly began to come under a different type of pressure. Oil prices accelerated from about

The Current State of the Japanese Economy and Remedies

35/barrel in 1981 to beyond

Monetary policy and oil price fluctuations following the subprime mortgage crisis

111/barrel in 2011. At the same time interest rates subsided from 16.7 per cent per annum to about 0.1. This paper explains how this long-term price increase was, in most cases, caused by expansionary monetary policies that heightened oil prices through interest rate channels. Aggressive monetary policies stimulated oil demand and blew up oil prices, a trend that led to slower economic growth. As for elasticities, the results described in this paper show that oil demand price elasticity is low value and unlike some earlier literature states, supply price elasticity is statistically significant. In last section, the results show that oil prices adjust instantly, declaring the existence of equilibrium in the oil market during the period from 1960 to 2011.

Effectiveness of the Easing of Monetary Policy in the Japanese Economy, Incorporating Energy Prices

Japan has reached the limits of conventional macroeconomic policies. Lowering interest rates will not stimulate the economy because widespread excess capacity has made private investment insensitive to interest rate changes. Increasing government expenditure in the usual way will have small effects because it will take the form of unproductive investment in the rural areas. Cutting taxes will not increase consumption because workers are concerned about job security and future pension and medical benefits. Expanding the monetary base will not induce banks to increase investment loans because the proportion of nonper-forming loans in their portfolios is growing because of the prolonged economic stagnation. In order for sustained economic recovery to occur in Japan, the government must change the makeup and regional allocation of public investments, resolve the problem of nonperforming loans in the banking system, improve the corporate governance and operations of the banks, and strengthen the international competitiveness of domestically oriented companies in the agriculture, construction, and service industries.

The Postal Savings System, Fiscal Investment and Loan Program, and Modernization of Japan’s Financial System

This study examines how monetary policy affected crude oil prices after the subprime mortgage crisis. Our earlier research found that easy monetary policy had a significant impact on energy prices during the period of 1980-2011. This paper finds that after the subprime mortgage crisis, the weaker exchange rate of the US dollar caused by the countrys quantitative easing pushed oil prices in US dollars upward over the period of 2009-2012, by causing investors to invest in the oil market and other commodity markets while the world economy was in recession in this period. This trend had the effect of imposing a longer recovery time on the global economy, as oil has been shown to be one of the most important production inputs.

Pro-cyclicality of the Basel Capital Requirement Ratio and Its Impact on Banks-super-∗

Abstract Japan has reached the limits of conventional macroeconomic policies. In order to overcome deflation and achieve sustainable economic growth, the Bank of Japan (BOJ) recently set an inflation target of 2 per cent and implemented an aggressive monetary policy so this target could be achieved as soon as possible. Although prices started to rise after the BOJ implemented monetary easing, this may have been for other reasons, such as higher energy prices as a result of the depreciated Japanese yen. This paper shows that quantitative easing may not be able to stimulate the Japanese economy. Aggregate demand, which includes private investment, did not increase significantly in Japan with lower interest rates. Private investment displays this unconventional behaviour because of the uncertainty about the future and because Japans population is ageing. The paper concludes that the remedy for Japans economic policy is not to be found in its monetary policy.

The Role of Public Works in the Political Business Cycle and the Instability of the Budget Deficits in Japan

The postal savings system and the Ministry of Finance’s Fiscal Investment and Loan Program (FILP) represent an extensive involvement of government financial intermediation in Japan’s flow of funds. As such, they constitute important parts of Japan’s financial system, but they are little known and little discussed outside of Japan.

The Response of Macro Variables of Emerging and Developed Oil Importers to Oil Price Movements

This paper proposes replacing the present Basel capital requirement with a new counter-cyclical measure. Optimally, (i) the Basel capital requirement ratio should depend on various economic factors such as the cyclical stage of GDP, credit growth, stock prices, interest rates, and land prices—hence, avoiding the expansion of bank loans during a boom period and a credit crunch during a sluggish period; (ii) the Basel minimum capital requirement rule should be different from country to country since the economic structures and the behavior of banks are different; and (iii) cross-border bank operation should follow the minimum capital requirement ratio where bank lending activities occur rather than the origin of the source of funds.

Response of Stock Markets to Monetary Policy: An Asian Stock Market Perspective

This paper discusses the Liberal Democratic Partys (LDP) ability to maintain a majority of seats in the Diet after WWII by focusing on the role of public investment. The paper discusses three periods, namely, (i) the high-growth period (1950 to 1985), (ii) the asset bubble period (1986 to 1990), and (iii) the period of economic downturn after the bubble (post 1990). During the high-growth period, government investment had a strong positive output effect and it increased the tax revenue in the medium and long run. The high rate of private capital formation boosted growth and tax revenue even further. During the asset bubble period of the late 1980s, Japanese tax revenue increased due to high asset and property prices, and growth stayed high because of strong aggregate demand. The Japanese economy experienced slower growth after the asset bubble burst. The LDP continued its high-spending policy by issuing Japanese government bonds (JGB) to finance the deficits but has not been able to revive growth to previous levels. Accumulated government debt now amounts to 180 percent of GDP and it will be difficult to issue any more JGB. Fiscal policy in post-bubble Japan no longer fulfilled the stability conditions that were identified by Blinder and Solow (1974).

An Analysis of Challenges Faced by Japan’s Economy and Abenomics

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 Peoples Republic of China (PRC). These countries were chosen for this research because they are the worlds 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 PRCs 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.