We use data from the Public Opinion Surveys on Household Financial Assets and Liabilities from 1991 to 2002 to investigate the issues of unobserved heterogeneity among cross-sectional units and stability of the Japanese aggregate money demand function. Conditions that permit individual data and...

We use annual Japanese prefecture data on income, population, demand deposits, and saving deposits from 1992 to 1997 to investigate the issue of whether there exists a stable money demand function under the low interest rate policy. The evidence appears to support the contention that there does...

The issues of identification, estimation, and statistical inferences of nonstationary time series and simultaneous equation models are reviewed. It is shown that prior information matters and the advantage of dichotomization of the traditional autoregressive distributed lag model into the...

We investigate the relationship between money, short-term interest rates, and scale variables. We use three monetary aggregates: Ml, demand deposits, and cash currency in circulation. Regional cross- sectional data yield stable estimates of the income elasticity of demand deposits that are...

This paper quantifies the policy duration effect of the zero interest rate policy implemented in Japan from February 1999 to August 2000. Our empirical analysis shows that the policy duration effect observed in Japanese financial markets emerged via the expectations channel on the future course...

This paper strives to answer five questions. First, why do legislators choose to create an independent central bank? Second, why do legislators delegate the conduct of monetary policy to a committee, rather than to a central bank governor? Third, what kinds of factors are crucial in limiting the...

This paper studies a small open economy with a large external debt. It begins by considering the long-term effects of shocks in the international capital market and domestic fiscal policy on the amount of outstanding external debt and the domestic reallocation of resources between the tradable...

This paper uses household survey data that cover the period from 2001 through 2003 to study the cash and deposits demand of households. These data enable us to obtain empirical findings that could not previously be derived through analyses using conventional macroeconomic time-series data....

Using Japanese regional data, we have obtained estimates of the income elasticity of demand deposits that are positive, have values that are close to one, and are statistically significantly different from zero, not only during the period of the low interest rate policy implemented after 1995...

This commentary summarizes the authors' main points of agreement and disagreement with respect to the proposal written by Dr. Hetzel. The authors agree with Dr. Hetzel's proposal on four points: after a central bank has lowered the interest rate to zero, (1) a central bank is not in fact...