Yoshi Fujiwara

Bank-Firm Credit Network in Japan: An Analysis of a Bipartite Network

We investigate the networked nature of the Japanese credit market. Our investigation is performed with tools of network science. In our investigation we perform community detection with an algorithm which is identifying communities composed of both banks and firms. We show that the communities obtained by directly working on the bipartite network carry information about the networked nature of the Japanese credit market. Our analysis is performed for each calendar year during the time period from 1980 to 2011. To investigate the time evolution of the networked structure of the credit market we introduce a new statistical method to track the time evolution of detected communities. We then characterize the time evolution of communities by detecting for each time evolving set of communities the over-expression of attributes of firms and banks. Specifically, we consider as attributes the economic sector and the geographical location of firms and the type of banks. In our 32-year-long analysis we detect a persistence of the over-expression of attributes of communities of banks and firms together with a slow dynamic of changes from some specific attributes to new ones. Our empirical observations show that the credit market in Japan is a networked market where the type of banks, geographical location of firms and banks, and economic sector of the firm play a role in shaping the credit relationships between banks and firms.

Deflation/Inflation Dynamics: Analysis based on Micro Prices

Micro price data show that individual price settings are not time-invariant as presumed in the existing literature. Furthermore, the analysis of autocorrelations shows that interactions of micro prices with leads and lags ignored in the literature play a very important role in explaining the behavior of aggregate price indexes. Price indexes such as the consumer price index (CPI) contain noises for the purpose of macroeconomics and monetary policy. The core CPI used by central banks, however, is defined merely on common sense and casual observation. We present a new method of extracting information on the systemic changes of aggregate prices based on micro price data. The so-defined true core price index is correlated with the number of overtime hours worked, the unemployment rate, and the exchange rate. It is not significantly correlated with money supply. Our analysis also shows that inertia arising from interactions of micro prices more plausibly explains the behavior of aggregate prices than do expectations.

Backbone of credit relationships in the Japanese credit market

We detect the backbone of the weighted bipartite network of the Japanese credit market relationships. The backbone is detected by adapting a general method used in the investigation of weighted networks. With this approach we detect a backbone that is statistically validated against a null hypothesis of uniform diversification of loans for banks and firms. Our investigation is done year by year and it covers more than thirty years during the period from 1980 to 2011. We relate some of our findings with economic events that have characterized the Japanese credit market during the last years. The study of the time evolution of the backbone allows us to detect changes occurred in network size, fraction of credit explained, and attributes characterizing the banks and the firms present in the backbone.

Visualizing large-scale structure of a million-firms economic network

The real economy in Japan comprises two million firms and billions of links of supplier-customer and other relationships. We challenge to visualize such big data, specifically how firms are connected to each other. We use a dataset of a million of firms and millions of links of supplier-customer and ownership relationships in order to directly observe such a network structure. We discovered interesting features of the economic network. Firms are connected by the links into tightly-knit groups with high density in intra-groups and with lower connectivity in inter-groups, namely by community structures. We found that the features of community structures are specific to individual industrial sectors, such as manufacturers, retails and wholesales, infra-structure-related sector, health-cares, and so forth. (Figure 1, the representative image attached to this paper is an example of graph drawing in which a million nodes are located with colors representing different industrial sectors). In the network, we also visualized how bankruptcies or failures of firms took place during one year right after the Great East Japan Earthquake in 2011.

Dynamics of Commodity Price Fluctuations in Japan

Deflation is a most important economic problem having been faced by Japan, and also developed countries in Europe, under zero interest rate. How individual prices influence each other, namely the dynamics of a large number of commodity prices and fluctuations plays a crucial role there. By using hundreds of individual commodities and their prices that comprise the import price, corporate goods price and consumer price indices, we show that price fluctuations have frequencies and synchronizations specific to space and time. Space means industrial sectors for the commodities and how they are located in the supplier-customer network. Temporal structure includes background movement due to deflation, inflation and exogenous shocks such as VAT (consumption tax) rate changes, the Lehman shock and so forth, but also endogenous shocks or mutual influences among the commodities.

Visualizing open data of input-output tables in Kobe city

One of the most practical tools in economics is input-output analysis developed by Wassily Leontief in the late 1930s who received the Nobel Prize in Economic Science later for this pioneering work. Today governments, national and local, in most developed countries publish the so-called input-output transactions tables (see textbooks, e.g. [Miller and Blair 2009]). For example, the Kobe city in Japan makes such data available as open data [Kobe city 2015].