Because a borrower often faces switching costs in dealing with individual banks, the financial health of any given bank might affect the borrower's cost of funds. These costs would be particularly large for firms that have close relationships with relatively few banks. The purpose of this paper...

Trade credit is one of the most important sources of short-term external finance for small firms. Previous literature has focused mainly on the substitution of bank loans for trade credit during monetary tightening among many firms, but in this paper we investigate the role of trade credit...

Empirical studies in corporate finance have long been interested in the role of banks in reducing the costs of financial distress. The purpose of this paper is to investigate how various measures of bank health and how defaults of major trading partners affected the probability of bankruptcy...

We define downward price rigidity as the state in which the speed at which prices fall is slower than that in which they rise. Based on this definition, we examine the downward price rigidity of each item that constitutes the core CPI of Japan. That is, according to the results of fractional...

We construct Bayesian vector autoregressive (BVAR) models optimized by the Posterior Information Criterion (PIC), in which hyper-parameters are data-determined in the same way as the lag length and trend order. We also assess the performance of the selected models by one-step ahead forecasts...

We investigate the significance of fundamentals variables and uncertainty of appropriate models in one-, two-, four-, and eight-quarter ahead forecasts of quarterly yen-dollar real exchange rates by using 16 fundamentals-based models and the random walk model. Our empirical results show...

This paper examines the Purchasing Power Parity (PPP) hypothesis of the yen-dollar exchange market by taking into account the following four points: accumulated current accounts as an additional variable, more powerful tests of Horvath and Watson(1995), more appropriate critical values through...

We empirically analyze the effects of uncertainty on investment, by types of uncertainty and by properties of stochastic processes; that is, permanent and transitory components separated from economic variables. According to our results, based on Japanese economic data, we find significant...

Even though monetary policy has kept interest rates at historically low levels, the Japanese economy has experienced long lasting recessions since the 1990s. These recessions are commonly attributed to nominal interest rates coming up against the zero bound and to the delay in achieving...

The inflation rate in Japan has been decreasing since the beginning of the 1990s. Although weak domestic demand most probably explains a large part of the story of this deflationary trend, external factors such as the recent increase in the number of cheap imported goods, have played an...