Friday, December 27, 2013

Robert Solow as a Keynesian

deficit reduction is bad policy in an economy that is not fully using the productive capacity it already has. What that economy needs is more buyers, not fewer. Deficit reduction can be good policy, growth-promoting policy, when the economy is fully employed and needs to generate new capacity.

There is no point in appealing to “the long run.” The long run is not some particular time in the future. Every quarter, every year, is the short run when it is happening. What economists usually mean when they say that something will be true in the long run is “when the economy has settled down to a well-behaved equilibrium,”

Thursday, December 26, 2013

One View on Abe's Visit to Yasukuni

In general, the (China's) war against Japan is used to fuel a sense that history thwarted China’s rightful rise. Of course, the Japanese right’s attempts to distort the history of the invasion should be condemned, as they are by many in Japan itself. But China’s leaders and public culture should not use the revised understanding of the war as a tool to build a new nationalism.

The proper use of history in public culture is to nurture a thoughtful and skeptical attitude toward the complexities of the past. By achieving this, China could really embarrass any Japanese leader who thinks about visiting the Yasukuni Shrine.

一般的に、中国の対日戦争が、歴史が中国の正当な台頭を抑えたという感覚を掻き立てることに使われている。もちろん、日本の侵略戦争をゆがめる右翼の試みは、 日本で多くの人によって戒められているのと同様に戒めなければならない。しかし、中国の指導者や一般の文化が、新しいナショナリズムを生み出す道具とし て、過去を利用してはならない。


Christmas and the Legacy of Japan

Christmas event may be needed whether you are a Christian or not: it is the time you can enjoy a good time to meet people, talk, eat, watch movies with them and it makes you and them greatly realize how wonderful and how precious a peaceful moment is.

Japan seems to have been more westernized than any other Asian country, and thus among people there has been growing respect for democracy, fundamental human rights and the value of peace, which has made most of them enjoy the age of no warfare for 68 years in Japan. However, or therefore, many people's growing interest cannot help being in the recent tension and politics of the East Asia, especially, China, S Korea and N Korea.

To keep the East Asia away from any warfare and conflict, first of all, I am hoping as a taxpayer and a Japanese citizen, Mr. Abe should have an official or unofficial talk with Ms. Pak and Mr. Xi. It should be much more important than his visit to Yasukuni Shintoism Shrine, which makes Mr Abe look like far more narrow-minded and insular toward China and Korea in spite of his sincere intention to wish peace.

Mr. Abe's next year challenge and great endeavor is how to preserve the legacy of Japan, that is, the achievement of keeping peace for 68 years, and how to solve any issue lying behind the neighbor countries that can be a menace to the legacy.

Tuesday, December 17, 2013




日本経済新聞 2012/2/11

How to Find a Girlfriend

While walking down the street, you find a very hot girl. What if there's a way to come close to or to have a date with her without saying a word to her?

In the world there is:

If you find a girl whom you like in the street, 

(1) Write a note, "I fall in love with you and call me 0**-99-*** if you like, thanks." 

(2) go closer to her, 

(3) drop it into her bag.

That's it.

I am not sure it works out well, but actually someone tried it in Yuraku-cho, Tokyo, Japan. 

He post cards in dozens of girls and a couple of girls called back!! But soon his act was reported to his workplace and he failed in his brave trial. However, I think that he gave a good lesson to us.

Monday, December 16, 2013


時事通信 2013/12/16

学校が食物アレルギーと把握している小中高生が、9年前の約33万人(2.6%)から約45万4000人(4.5%)に増加したことが16日、文部科学省 の調査(速報値)で分かった。

誤って原因食物を口にしたケースが、昨年度少なくとも40件あったことも判明した。専門家は「アレルギー増加の側面もあるだ ろうが、保護者らの認識が高まり、掘り起こしが進んでいるのだろう」と話している。


Sunday, December 15, 2013

My Voice

I don't like Christmas (commercial) mood...songs, decorated trees, cake or so. Everyone, please spend money, raise the stock market and have me earn a lot! That's my real inner voice.

Saturday, December 14, 2013

On recent Empress Michiko

Freedom and democracy are thought to be the very Western value. 

More than 100 years ago, young Japanese people were seeking too. I happened to see the Empress Michiko talking about their ideal on her birthday, and I also happened to see and visit the Folk Museum of Itsukaichi and knew the Itsukaichi Constitution Draft while staying in Tokyo.

Though it was quite a rare that she talked about something related to politics, I believe that Her Majesty talked about her true feeling. 

I am so happy to hear her voice anyway...

Thursday, December 12, 2013

On "Fighting for peace is like screwing virginity"

Since yesterday, the line, "Fighting for peace is like screwing virginity" has run in my mind..,

Wednesday, December 11, 2013

Shoin's line

Whoever has no dream has no ideal,
whoever has no ideal has no plan,
whoever has no plan has no practice,
and whoever has no practice has no success.

Therefore whoever has no dream has no success. 

Shoin Yoshida

〔訳〕夢無き者に理想なし、理想無き者に計画なし、計画無き者に実行なし、実行無き者に成功なし。ゆえに、夢無き者に成功なし。            吉田松陰(教育者)

Tuesday, December 10, 2013

Countries or Cities??

Being in Tokyo is a sufficient condition for being in Japan, but not necessarily vise versa. 

Is NYC the same as City of Chicago? Is Toronto the same as Vancouver? Seoul must be different from Busan. 

Now I realize that when I talk about a country, I should focus on cities in the country.

Monday, December 09, 2013



「10月の国際収支、9か月ぶり赤字…円安響く」(読売 2013/12/9)






自動車や軽油などの輸出が増えたものの、火力発電の燃料となる液 化天然ガス(LNG)や原油の輸入がかさんだ。輸入は前年同月比1兆5243億円増の6兆9251億円、輸出は同8837億円増の5兆8332億円だっ た。

On December 8th and the History

How many Japanese and American people remember the day of December 7th(in Japan 8th)? 

Walking along the street, I usually hear right-wing guys crying out the cliche that the war was so right that Japan helped the world to be kept away from the control by the white people. It is no problem for them to make such a speech in public whether the speech is politically so biased or well balanced.  

As hearing such a voice again and again, I come to feel that it is a right statement and that another one is wrong. 

The important thing may be the lesson we can get from the past that it is a one-sided understanding of the history that should twist our perspectives of our life and world, and that should keep us from building the bright future.

何名の米国・日本人はその日を覚えているのか。街を歩いていると右翼の連中が、先の戦争は正しかった、日本は白人支配から世界を救った、という決まり文句 を連呼していた。 

何べんも聞くと、それが正しいように聞こえ、他の意見に耳を貸さなくなる。我々にとって重要なのは、凝り固まった歴史認識こそが、人生観、世界観をゆがめ、 新しい時代を築くことはできないという教訓ではないだろうか。

Tuesday, December 03, 2013







Monday, December 02, 2013

We're all Japan

In the world as it is, we are all Japan in the early 1990’s, looking ahead to two or more decades of lost economic growth. Bradford DeLong

Friday, November 22, 2013

Consumption Tax

Tax consumption rather than tax paycheck

Cut government spending rather than increase tax

Enhance economic growth rather than cut spending

Enhance people's happiness rather than economic growth

Raise the next generations rather than people's happiness

Raise the tax to raise the next generations

A politician thinks of the next election. A statesman, of the next generation.
James Freeman Clarke

Tuesday, November 19, 2013

Vending Machine

Almost Five years have passed since I started teaching at tech schools and college. 

I have realized that I should be a vending machine: it always provides people with good and new products and if the contract expires, it finds new buyers. 

Everyone should be my buyer with new competitors behind me. Vending machine is necessary for us, and I should always be like it.

I have never been a good vending machine for students since ever. It is difficult for me to become a good vending machine. 

Monday, November 18, 2013

On Modern Capitalism

My coworker says, 

"Seeing students looking for a job in black suit and simple tie, they look like they are going to be in slavery..." 

I feel like agreeing with him. To build the modern capitalist society, it is necessary for people to  prefer working for company or some other organization. 

Behaving independently should be fine in the society as described in economic theory, but many people are not so clever, rational and strong that they can perform well independently. That's why we need company or some other types of organization to organize and coordinate ourselves. (And that's the very work of a great economic theorist, Ronald Coase.)

So we can say that modern capitalist society needs slavers working for company to make the society capitalistic, and if it is true, then I would say that I agree with anti-capitalists' idea when I disagree with slavery anyway.  

Saturday, November 16, 2013





Friday, November 15, 2013

Exams for Government

I have class to teach economics for the entrance exam for government. 

Here in Japan to get a job of the government, we should take an exam of economics and law. 

I (and everyone for sure) hate exams and it looks weird for me to teach how to get a good score. 

It may be a surprise for you that every Japanese government employee has learned economics when you see the recent performance of the Japanese economy. (Well, recent Japanese economy looks good after the chairman of BOJ changed.)

It may be a good proof that Japan has been a socialist country where the government control and command is highly influential....

Tuesday, November 12, 2013






Monday, November 11, 2013

Living under the Uncertainty

Recently I have learned the necessity to tell risk from uncertainty:

Risk is what can happen with some probability that can be known for sure, while uncertainty is what can happen with some probability that cannot be known for sure: Risk is known unknowns, while uncertainty unknown unknowns. Technically, Risk is unknowns with known cumulative distribution functions (CDFs), while (Knightian) uncertainty is unknowns without known CDFs.   

We are now and always in the world of uncertainty where we cannot see what will happen soon.

It is a sad thing to know what will happen in the future, but it is a happy thing not to be informed of what will happen to us.

What we know for sure about uncertainty is that we cannot know only that a good thing will happen, but also that a bad thing will happen. 

We are said to have a biased view on uncertainty: we are always worried that a bad thing or the worst thing will happen to us, while forgetting the likelihood that a good thing or the best thing will happen. 

We are more likely to avoid unknown unknowns. We may change the attitude toward uncertainty to make our life better and better, and need to learn about how to deal well with unknown unknowns.

Sunday, November 10, 2013

A True Role of Fortunetellers

Whether you may agree or not, I think that fortunetellers are almost always right: They say a right thing about you and your uncertain future. 

The reason is simple: fortunetellers are well familiar with the people coming up to ask themselves. They are generally worried about their own future, their career, lifelong partners and business and so on. Otherwise, they won't come up to ask fortunetellers.

What's more, those who ask fortunetellers may be seeking the very similar answers or hints. They are not seeking a bad thing about their life, rather a good thing.

I've heard some medical researches report that fortunetellers are playing a role just like mental counselors: By listening to and saying a good thing about the people, fortunetellers can heal them. 

Last night, after drinking a little, I dropped by a fortuneteller sitting in the chair along the street and asked her about my near future. 

I don't believe such a superstition, and after listening to her I decided never to ask her again. No, she didn't say a bad thing about me, but rather she told that my future would be fine and better. Then I realized that true success will never comes just if I wait for it to come. 

I say to myself, I should make a decision by thinking myself and take the responsibility if I want to make my future brighter and brighter.

Saturday, November 09, 2013



産経新聞 11月9日(土)12時20分配信
 神奈川県警捜査3課などは8日、住宅に忍び込んで現金を盗んだとして、住居侵入と窃盗の疑いで、川崎市多摩区の無職、城戸隆志容疑者(47)=同容疑で 逮捕=を再逮捕した。城戸容疑者は窃盗を繰り返しながら家族を養っており、「生活費や遊興費、マンションのローンなどに使った。約20年間、泥棒で生活し てきた」と容疑を認めているという。



20年も泥棒してたら、 立派な職業だ。

Friday, November 08, 2013

It Can't be Helped Now....

I don't think that the US was wrong in bombing atomic bombs. 

It should have been a right decision that the US could make at that time. 

The problem is why then the US should have used atomic bombs: Is it because there was fear of the power of a giant socialist, the Soviet Union? Or, is it because then the President Harry Truman wanted to gain more support among then the American citizens? 

These reasons sounds true, but I can think up another reason for that:
the US wanted to succeed in the Bretton Woods system and needed to become politically strong enough to make their currency, dollar, accepted as the world currency such as gold. 

The US needed to be stronger than other political giants and so it should have bombed atomic bombs.

Wednesday, November 06, 2013

Tuesday, November 05, 2013

Modern Externality

While I see the people in the downtown chatting, listening to music and watching TV with smart phones and some of them annoying neighbors, I come to think that they should be taxed as high as gasoline and tabaco are taxed. OK, facebook and twitter may well be taxed too, and people will be much freer from what always bothers themselves.

Monday, November 04, 2013

Who Is the True Leader?

Suppose you were the President or the Prime Minister and your fellow citizens were taken as hostage by terrorists. What to do? Save them to accept the terrorists' request? Refuse the request instead of saving them? I think that it's a real job that a real leader should do.

Sunday, November 03, 2013

On Money Multiplier

Central bank prints yen bills, say 1 billion yen, by buying government bonds worth 1billion yen from private banks. Then private banks lend 1 billion yen to people.

Through this process, how much money can increase in the economy as a whole?

This is the problem of money multiplier and here's how to calculate it:

1.People borrow 1 billion yen from private banks and they deposit 1/(1+a) billion yen in the private banks. a is a ratio of currency to deposit, currency/deposit, or deposit:currency=1:a.

2.Then the private banks again lend (1-r)/(1+a) billion yen to the people and they again deposit (1-r)/(1+a)^2 billion yen in the private banks. r is a ratio of reserve to deposit, reserve/deposit. Reserve is the deposit of private banks in the central bank.

Through these processes repeated again and again, money in the economy as a whole increases by (1+a)/(r+a) billion yen.

The calculation is,  1+1*(1-r)/(1+a)+1*{(1-r)/(1+a)}^2+...= 1*(1+a)/(r+a)

The right term, (1+a)/(r+a), in the above identity is called money multiplier.

For example, if a=0.4,r=0.2, then 7/3=2.333, and thus 1billion yen can increase by 2.3 billion yen (1.67 billion yen increase in deposit and 0.63 billion yen increase in currency).

If a increases to 0.5, r remains the same, 0.2, then the money multiplier is 2.14. If a remains the same 0.4, r increases to 0.3, then the money multiplier is just 2.

The lesson is, if the ratio of currency to deposit or the ratio of reserve to deposit increases, the money multiplier decreases. 






Friday, November 01, 2013

School, Money, Social Welfare and Life

People saying that experience is more important than school and love is more important than money may have no experience of crisis in life; School is necessary to get a job, and money is necessary to live a life.

Indeed school should be the place where we learn how to make a decision ourselves through studying, friendship, bullying and love, but in real world there seem to be a lot of people who rely on others; Some people saying that people depending on social welfare are asshole should get aware that people working for company face almost the same situation as do those depending on social welfare: No company, no job, no money and no life.

We may have studied how to depend on company, government and other people in school: how to get liked by everyone, how to look good, and how to have us appreciated in workplace may have been most necessary to learn in life. It can hold true when people get together and can make it, but, looking around, I can see many old people sipping tea in the afternoon and such a golden age has already ended.

He or she may have struggled to make a living, but as a result he or she is forced to apply for social welfare. Hearing that news, I realized that I am next to, and that rising social welfare and rising national deficit and debt incurred by it posts a doubt on the life we live depending on and getting appreciated by others, and asks us to change the way we live.

Friday, October 18, 2013

U of Chicago on Fama and Hansen

The following is a report by U of Chicago:

Fama’s work demonstrated that new information is very quickly incorporated into the market, making it difficult to predict short-term changes in asset prices. Hansen developed a statistical method for testing rational theories of asset pricing like those advanced by Fama and Shiller.

They are among the 89 scholars associated with the University to receive Nobels, and among the 28 who have received the Nobel Memorial Prize in Economics. 

Hansen’s “powerful, pioneering” methods for assessing economic models have been adopted by social scientists in many fields, said List, the Homer J. Livingston Professor and chair of Economics. “Whether it is to explore how public policies effect unemployment rates, how networks form, or how environmental regulations influence productivity growth, Lars’ work plays a key role.”

Fama’s early work on efficient markets, which gave rise to the index funds many investors participate in today, not only revolutionized academic finance, but also made “a phenomenal impact on the practical world, and really on people’s lives,” said John Heaton, the Joseph L. Gidwitz Professor of Finance and Deputy Dean for Faculty at Chicago Booth.

Fama coined the term “efficient market” and the term gained widespread use following publication of “Efficient Capital Markets: A Review of Theory and Empirical Work” in the Journal of Finance in 1970. The efficient markets hypothesis holds that, as a result of competition, equilibrium prices in financial markets incorporate all relevant information.

Hansen’s research looks at ways to bridge the gap between economic models and economic and financial data. His work has led to improved methods for formulating, analyzing and testing dynamic economic models in environments with uncertainty. He has applied these methods to study the determinants of consumption, savings and security market prices.

Thursday, October 17, 2013

Robert Shiller on Finance

Finance is misunderstood as the field about how to make money, how to get rich. Finance is the study of human activity, human activity at large. 

Finance is about financing activity; making the resources available, insentivizing people, spreading risks...substantially about risk management,..useful to real people, not just to minority people. 






Wednesday, October 16, 2013






Cochrane on Efficient Market

It's what caught my eye in the note of Cochrane on Fama's work:

(1) Financial markets are, at heart, markets for information.

(2) Markets are “informationally efficient” if market prices today summarize all available information about future values.

(3) A natural implication of market efficiency is that simple trading rules should not work, e.g. “buy when the market went up yesterday.”

(4) If markets are informationally efficient, the “fundamental analysis” performed by investment firms has no power to pick stocks, and professional active managers should do no better than monkeys with darts at picking stocks portfolios.

(5) If markets are informationally efficient, then corporate news such as an earnings announcement should be immediately reflected in stock prices, rather than set in motion some dynamics as knowledge diffuses.

(6) For nearly 40 years, Gene Fama’s efficient market framework has provided the organizing principle for empirical financial economics.

(7) You can get a higher return, in equilibrium, in an efficient market, but only if you shoulder more risk.

(8) The Capital Asset Pricing model (CAPM) specifies that assets can earn higher returns if they have greater “beta” or covariance with the market portfolio.

(9) Actually checking stock price reactions to corporate events is not as straightforward as it sounds.

(10) The efficient markets work of the 1960s and 1970s found that stock returns are not predictable ("random walks") at short horizons.

(11) If expected returns and risk premiums are high, this will drive prices down. But then the “low” price today is a good signal to the observer that returns will be high in the future.

(12) Low prices do not cause high returns any more than the weatherman causes it to snow.

(13) The fact that the vast majority of stock market fluctuation comes from changing expected returns rather than changing expectations of future profits, dividends, or earnings, will fundamentally change the way we do everything in financial economics.

(14) The key observation is that “value stocks” -- those with low prices relative to book value -- tend to move together. Thus, buying a portfolio of such stocks does not give one a riskless profit. It merely moves the times at which one bears risk from a time when the market as a whole declines, to a time when value stocks as a group decline.

(15)  Once you understand the definition of efficiency and the nature of its tests, as made clear by Gene 40 years ago, you see that the latest crash no more "proves" lack of efficiency than did the crash of 1987, the great slide of 1974, the crash of 1929, the panic of 1907, or the Dutch Tulip crisis.

(16) The heart of efficient markets is the statement that you cannot earn outsize returns without taking on “systematic” risk.

(17) All of us can invest in passive, low cost index funds, gaining the benefits of wide diversification only available in the past to the super rich (and the few super-wise among those).In turn, these vehicles have spurred the large increase in stock market participation of the last 20 years, opening up huge funds for investment and growth. (...)The recognition that markets are largely “efficient,” in Gene’s precise sense, was crucial to this transformation.

Tuesday, October 15, 2013

Robert Shiller

Taro met the Nobel Prize Winner of 2013, Robert J Shiller, who is also a coauthor of "Animal Spirits". Professor, congrats.

Saturday, October 05, 2013

Keynesian Economics and Classical Economics

It might be quite a little old question, but what is the difference between Keynesian Economics and Classical (Walrasian) Economics?

Now in economics there's no big disagreement about the coexistence of Keynesian and Classical economics, but many economists explain about Keynesian economics from the viewpoint of Classical economics and they think that economics should be based on Classical economics.

The difference is not related to some ideology, but to point of view: Keynesian economics focuses on the short-run and demand-side economy while Classical one on the long-run and supply-side economy.

Of course, both sides of economics agree that competitive households and firm think at margin when making an optimal decision and that competitive economy is Pareto-optimum.

However, they think differently when they look at the whole economy: Keynesians think that the whole economy should fail to be composed, what is called the 'fallacy of composition', and some little shock (tax policy change or so) can be very big impact on it. In contrast, Classical economists think that the whole economy should be consistently composed by each optimal decision making and thus that some little shock can be as little as itself on the whole economy.

Classical economists admires 'Neutrality Theorem', while Keynesian economists 'fallacy of composition'. The former says that changes in monetary expansion or government expenditure have almost no impact on the whole economy because each person makes every decision as looking ahead in the future, while the latter says the opposite because each person doesn't look forward.

Which idea is right? The point is the view each side of economics puts weight on. Some problems are though to be better analyzed from the viewpoint of Keynesian economics while others are not. Which side should be taken depends on what economists think as of importance. 

Sunday, September 29, 2013



これと似た調査は、厚生労働省の「毎月勤労統計調査」。こちらによると、日本人の平均月給(現金)は26万円(2013/07)。特別給込みだと36万円。 両方の数字は税 金・社会保険料は含んでいる。それらを除くともう少し低い水準になるだろう。




Wednesday, September 04, 2013

If you want to stop your neighbor from smoking...

You don't like cigar and your neighbor smokes a lot. What will you do? Kill him? Oh, it's a 'mafia' or 'yakuza' solution. Economics may have milder solution to it! Ask him, "would you mind if I asked you not to smoke??" If he says 'Yes, I would!', then you will ask him to offer a trade like this: how much should I pay if you stop smoking for me?? The smoke is 'the negative externality' that makes you feel bad, while the nonsmoke the negative externality that irritates your neighbor. So there's some room for you to make such a deal if you want to solve the problem.    

According to Mankiw's best-seller introductory textbook, "the Coase Theorem is the proposition that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their own." (2007,POE, 4th. ed., pp210-211)

The Coase Theorem says that the efficient (Pareto-efficient) amount of the good involved in the externalities is independent of the distribution of property right if there is no income effect, which means that the efficient allocation will be achieved if the demand for the good causing the externality doesn't depend on the distribution of income.
(Varian, Hal,2003,Intermediate micro, 6th ed., pp607-608)

But I recall the debate on the transaction cost:

(1) The Coase theorem implies that if the transaction cost is zero(or if the interest parties have no trouble reaching and enforcing an agreement), it doesn't matter who we assign property rights to.

(2) The Coase theorem implies that if the transaction costs are less than the gains from trade (or if the interest parties may have some trouble reaching and enforcing an agreement, but they agree that the gain from the trade will be greater than the time and money it costs and takes to reach an agreement ), it doesn't matter who we assign property rights to.

Which is right? I think these above 2 statements are (almost) equivalent, but (1) is stronger statement than (2).
Though Mankiw's text takes the former and some economists the latter, Mankiw's text says that if the benefit of solving the externality problem is less than the transaction cost of reaching the beneficial trade, the problem will leave unsolved or it matters who we give the property rights to and the Coase Theorem doesn't apply.

Thus even if there's some positive transaction cost,  the Coase Theorem will apply as long as the benefit of the trade is greater than the cost of agreeing the trade.

Sunday, August 18, 2013






(1)⊿k=sf(k)-(n+g)k, s:貯蓄率,f(k):一人当たりGNI,n+g:実質GNI成長率













よって、k*={α/(n+g)}^{1/(1-α)}  となる。ここで、⊿k=0のとき、

k*={s/(n+g)}^{1/(1-α)} なので、




Thursday, August 15, 2013

Krugman on Friedman

August 11.2013, NY times

the experience of the past 15 years, first in Japan and now across the Western world, shows that Keynes was right and Friedman was wrong about the ability of unaided monetary policy to fight depressions. The truth is that we need a more activist government than Friedman was willing to countenance.

Friday, July 19, 2013

The Great Gatsby Curve

On the horizontal axis is the Gini coefficient, a measure of inequality. On the vertical axis is the intergenerational elasticity of income — how much a 1 percent rise in your father’s income affects your expected income; the higher this number, the lower is social mobility.(Krugman)

Monday, May 20, 2013








Friday, May 17, 2013

Christina Romer on Japanese Monetary Policy

Christina Romer speaks about the recent Japanese monetary policy and she insists on the importance of the regime shift of monetary policymaking at the time of deflation and stagnation.

While I read it, I find that Mr. Kuroda, the governor of BOJ, tried the regime shift.

Romer does not know if Mr.Kuroda's monetary policy will work, but she says that the regime change was the key factor to the recovery from the Great Depression of the 1930s.

Her report is very important in that she puts emphasis on the role of regime shift in macroeconomic policymaking.  

Saturday, May 11, 2013

A US Congressional Report

I have read the US Congressional Report for the first time:

This caught the attention of the Japanese Press:

"Comments and actions on controversial historical issues by Prime Minister Abe and his cabinet have raised concern that Tokyo could upset regional relations in ways that hurt U.S. interests. Abe is known as a strong nationalist."

The Press especially likes 'Abe is known as a strong nationalist'. And so what? 

Japan has a weak political structure(especially divided parliament) and economy. The people get older and older, and get tired of their rigid politics. Japan needs to tackle such challenges. Well said!

Wednesday, May 08, 2013

Romer on Inflation Targeting

The Bank of Japan has acceped the inflation targeting as a new monetary-policy framework, which has said that it will double the monetary stock in two years and that it will reach 2% of the rate of inflation.

David Romer, the famous author of the graduate textbook, 'Advanced macroeconomics', talked about the inflation targeting;

Concerning monetary policy, inflation targeting appeared to be a wonderful framework for its first fifteen or twenty years. But we have now had an extended period where it has shown itself incapable of providing aggregate demand at the level that is widely recognized to have been needed. So it seems important to think about whether we should have a different framework for monetary policy. 

日本語訳: 金融政策に関して、インフレ・ターゲティングは最初の15年か20年は優れた枠組みのように見えたが、もはや金融政策が必要だと広く認知される水準まで総需要を引き上げることが困難な時期に来ている。金融政策について違った枠組みを考えることが重要であるように思える。 

Sunday, February 24, 2013








Tuesday, January 29, 2013

More Responsibilities, Less Independence

Financial Times: Downturn erodes central bank independence.

the downturn has weakened their operational independence as it has left them filling in for governments unable, or unwilling, to prevent an economic slowdown, a report, due to be published on Tuesday, has said.

Central banks have taken more responsible for stabilizing the economy and undergone more political pressure from the government.

People are now expecting for the power of central banks managing and controlling the financial markets and thus the national economy and they cant ignore it any longer.

The questions to this problem is,

(1) Does this matter? To whom? Does it go without saying "So what?"?

(2) Any negative effect on the economy and the people's lives? Say, higher prices or higher interest rate, or something?

(3) What does "independence" mean? Why do central banks need their operational and instrumental independence?

Sunday, January 27, 2013

Mankiw on World Economy

Prof. Mankiw, one of my role models, talks about the world economy. Already more than one year passed since it came out, it is still worth reading carefully: Four Nations, Four Lessons

(1)Zimbabwe: Printing money too fast results in hyper inflation.

(2)Japan: Increasing the govt. spending results in the deficit and debt.

(3)Greece: Keeping the government large results in higher interest rate and default.

(4)France: Making the public welfare better results in higher tax and less work. 

After all, stabilizing the national economy is, at any rate, pricey.   





「政策手段は日銀が独立して行う。中央銀行の 独立性の維持はいささかも揺らいでいない」





Saturday, January 26, 2013







(1) 中央銀行の金融政策にはインフレ的な経済運営を求める圧力がかかりやすい


しかしながら、 例え専門的・中立的な判断に任せても、インフレ(物価の持続的騰貴)にならないという保証がない。その保証はどこにあるのだろうか。









Tuesday, January 22, 2013















確かに、IMFの国際的な比較統計を見ても、インフレと名目利子率はプラスに相関し、ほぼ1対1に対応している(マンキューのマクロ経済学に載っている)。 しかしながら、固定金利であれば名目利子率は頻繁に変更されない。よって、実質利子率は名目利子率が変更される期間までに変化する。


On Quantitative Easing

This video (and this guy) is talking about what the quantitative easing is and what its difference is from the other traditional monetary policy, target lending rate.

FRB or Fed, the central bank of the US, plays an important role: it makes monetary policy to create money that people spend on goods and service.

(1)Zero target lending rate(ゼロ金利政策)

This policy is to lower the interest rate at which private banks lend money to each other. Now they can borrow money at the lower rate: it gets easier for them to lend money to business people. Thus they are more likely to borrow money from banks because the rate is lower than before.

However, private banks usually prefer buying safer assets (the treasury bills) to lending business people money (riskier assets). Therefore they don't lend more money to business people but buy more treasury assets.

(2)Quantitative Easing(量的緩和策)

This policy is to buy the assets that private banks hold and the treasury bills. Then private banks now can have more money at the very low cost and they are less likely to buy the treasury bills.

The difference from zero-rate policy is, the Fed buys the bills and the rate the bills offer gets lower and lower. Thus private banks are more likely to lend more money to business people.    

Monday, January 21, 2013

The US Economy: Back to the 1930s?

Recently I've been more careful of how the world macro-economy evolves. Especially it seems to me that the US economy is going back to the 1930s' Great Depression.

I might have been much influenced by that very serious New York Times' columnist, but while just looking at the data of the FRB (the central bank of the US), we can see how much the quantitative easing (QE), FRB increasing the money is stabilizing the US economy:

(1) Monetary base (the money that FRB can directly increase): since the Lehman shock of 2008, FRB has increased so much of it.

(2)M1 money stock(the money that was once called money supply and that FRB cannot directly increase): since then it has been increased gradually.

(3)M1 money multiplier(the ratio of the money stock to the monetary base,
money stock/monetary base, that FRB cannot control directly either): interestingly it has been decreasing since the bankruptcy of Lehman Brothers, and been crawling below 1. That is, though FRB has put an extremely large amount of the monetary base, the money stock has not increased so far more than had been expected.

(4)Velocity of M1 money stock (the number of times one dollar is used to purchase final goods and services included in GDP): Following the declining money multiplier, it has been also decreasing since the Great Recession of 2008, which means that the American people spend less than before.

The point is, as Milton Friedman and Anna Schwartz(1963) saw the Great Depression of 1930s, that a great rise in the monetary base, though we can see a gradual increase in the money stock and we can conclude that an increase in the base money increases the money stock, results in a fall in the money multiplier and the velocity of the money stock.

Some pundits say, the solution to a deep recession is, Friedman and Schwartz suggested but I am reluctant to agree, FRB increasing much base money.

Until now the modern US economy looks like that of the Great Depression of 1930s and we have to look more carefully at how it is going to be. Will the QE work well? Tomorrow never knows.

Saturday, January 19, 2013











「人々はモノよりもお金(紙幣=印刷された紙)に執着する現象が発生するのです。この現象がデフレです。人々は紙幣(=印刷された紙)を欲し がってモノを買いません。モノが売れないので企業の業績は悪化し、失業が増え、若年層が定職に就くことができず、世の中に悲観ムードが広がっています。」












「実質利子率をインフレ期待を起こすことで低下させ、1人当たりの実質生産(消費)量を増やせる」(フィッシャー方程式: 実質利子率+期待インフレ率=名目利子率)







(1)については、大した問題でないかもしれない。「心理的な不安」が地域に蔓延することにより、クーポン券を控えておく人々が増えた。すなわち、クーポン券に対する「需要」が増えてしまい、いわゆる「流動性の罠」に陥ってしまった。 この「罠」を克服するためには、


































Thursday, January 17, 2013





(1) 円安⇒輸出増加(マーシャル・ラーナー条件を満たすとき)


(2) 輸出増加⇒輸出産業の利益増加


(3) 輸出増加⇒株価上昇























Tuesday, January 15, 2013

Krugman On Abenomics

Mr. Krugman, our hero, is talking about Abenomics in NY Times.

I showed you my own view on Abenomics at the end of last year and I would like you to read it along with Mr. Krugman.

Soon I am going to talk here about Abenomics as another essay. This Krugman's essay should be one of the references to it.

Sunday, January 06, 2013







幸い、私の通った大学院はmicroはVarian(1992), microeconomic theory, macroはBlanchard and Ficsher(1989), lectures on macroeconomics or Romer, advanced macroeconomicsで、邦訳がそろっていた。 英語が苦手でも救われる。が、しかし、英語を読む力は、大学院での学習度合いを左右する。洋書の方が良書が多いのは事実で、和書も良い本が増えてはいるが、選択肢は大幅に狭まる。

経済系学部以外からの進学者を想定して、近年ではmath campなるものが授業開始前に行われ、数学の基礎が教えられる。しかし、経済学の学習には3つの数学的素養が欠かせない。




もし、経済の数学をもう少し基礎から勉強したいなら、高校数学 第4巻 数研出版 がおすすめである。
























決して高い学費を溝に捨てていない。 しかし、もう少し上手く大学院での勉学を進める方法はあったのではないかと悔やんでいる。