Authorship：Lead author   Language：English   Publishing type：Research paper (scientific journal)   Publisher：Springer  

DOI： 10.1007/s40844-020-00169-y

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Publishing type：Research paper (bulletin of university, research institution)  

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Language：Japanese   Publishing type：Research paper (bulletin of university, research institution)   Publisher：Economic Society of Rikko University  

DOI： 10.14992/00018464

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Authorship：Lead author   Language：English   Publishing type：Research paper (scientific journal)  

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Authorship：Lead author   Language：Japanese   Publishing type：Research paper (scientific journal)  

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Authorship：Lead author   Language：English   Publishing type：Research paper (scientific journal)   Publisher：Emerald Group Publishing Ltd.  

The Japanese economy experienced prosperity during the bubble economy and has suffered from a prolonged recession since the bubble economy collapsed. This paper examines how the interest-bearing debt burden, structural change, and instability of confidence affect dynamic systems. Moreover, it examines these factors in the Japanese economy by applying a recursive vector autoregression analysis. This paper emphasizes the interest-bearing debt burden, the economic structure resulting from the instability of confidence, and the instability of confidence resulting from debt burden play important roles in the instability of the economy. As a result, Japan's economy was determined to be relatively stable from 1980 to 1996, but was unstable, thereafter.

DOI： 10.1108/S0161-723020170000032004

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Language：English   Publishing type：Research paper (scientific journal)  

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Language：Japanese   Publishing type：Research paper (scientific journal)   Publisher：経済理論学会  

The recent international monetary crisis, triggered by the 2008 subprime loan crisis in the US, still casts a dark shadow over the world economy. Owing to this upheaval, the financial instability hypothesis proposed by heterodox economist Hyman P. Minsky has received renewed attention. Many mainstream economists admire Minsky's keen insight. The financial instability hypothesis and the formal mathematical models on related topics treat the cumulative debt burden as one of the causes of financial instability. In addition, the Kaleckian and stock-flow consistent models, which explicitly consider interest-bearing debt burden, have, in recent years, been extensively developed. Ninomiya and Tokuda (2011, 2012) introduced the concept of "instability of confidence" and examined the structural change of an economy. In this study, we construct macro-dynamic models that consider interest-bearing debt burdens and the instability of confidence. Furthermore, we examine financial instability and cycles based on the financial instability hypothesis and related mathematical models. This study highlights the following items as significant causes of economic instability: 1)cumulative interest-bearing debt burdens; 2)fragile financial structures; 3)and the instability of confidence. In other words, a robust financial structure plays an important role in addressing a crisis of confidence. This study also suggests that the recent policy of quantitative easing may exert harmful side effects on the economy. This study implies that some new policies and institutional frameworks are needed to construct a robust financial structure. Furthermore, we can prove that there are closed orbits in the dynamic systems by applying Hopf bifurcation theorem. Interest-bearing debt plays important role in terms of financial cycles in this study. The degree of the instability of confidence also has an important role for one of the financial cycles in this study. The financial cycles in this study are quite different from the Kaldorian business cycle.

DOI： 10.20667/peq.51.4_83

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Authorship：Lead author   Language：English   Publishing type：Research paper (scientific journal)  

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Language：Japanese   Publishing type：Research paper (scientific journal)   Publisher：Japan Society of Political Economy  

The subprime loan crisis of 2007 in the USA, which took lead in the market-oriented economic reform, marked the beginning of an international monetary crisis. Several nations, such as Iceland, have suffered from this crisis. Some economists on Wall Street are of the opinion that the financial instability hypothesis proposed by Hyman, P. Minsky deserves consideration (Lahart (2007)). Taylor and O'Connell (1985) presented a simple macroeconomic model on financial instability and proved that an economy would fall into a financial crisis if a decline in the expected profit rates aggravated the financial condition of firms and increased the household preference for liquidity. Semmler (1987) interpreted their idea as a nonlinear "S-shaped" saving function and presented a financial cycle by applying the Hopf-bifurcation theorem. The S-shaped saving function refers to the saving that is assumed to depend on the difference between the level of current income and that of its normal income. For example, bank loans increase in an expanding economy because lender risks decline. This study introduces the concept of "instability of confidence" and incorporates the factor of lender risks into a macrodynamic model on financial instability to illustrate the financial cycle and instability. It demonstrates that an increase in the instability of confidence makes the economy unstable when the economy's financial structure is fragile. The business cycle in this study occurs despite the marginal propensity to invest being relatively lesser than that to save. It is different from the Kaldorian business cycle models. Furthermore, this study examines changes in the financial structure using data from the Japanese economy. One characteristic of this analysis is that it is a subsample comparative analysis which focuses on the creation of proxy variable that show the instability of confidence and on the VAR model which introduces the proxy variables. This study reveals that the instability of confidence increased in the mid-1990s.

DOI： 10.20667/peq.48.2_81

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Language：Japanese   Publishing type：Research paper (scientific journal)   Publisher：Japan Society of Political Economy  

There has been antagonism between neo-classical and Keynesian macroeconomics since the 1980s. Neo-classical economists have criticized the IS-LM model for reasons such as lacking a microeconomic foundation and assuming price stickiness. Neo-classical and Keynesian economics also hold differing theories of interest rate. In short, neo-classical economics adopts the saving-investment theory of interest rate determination, whereas Keynesian macroeconomics adopts the liquidity preference theory. Mankiw (1992) proposed a macroeconomic model in the short and long run. He interpreted the IS equation as the saving-investment theory of interest rate and the LM equation as the quantity theory of money. Romer (2000) and Taylor (2004) presented another macroeconomic model in which a monetary policy rule was introduced in place of the LM equation. Romer (2000) and Taylor (2004) abandoned any differing theory of interest rate between neo-classical and Keynesian economics. On the other hand, Minsky (1982; 1986) who was a heavyweight in post-Keynesian economics proposed the financial instability hypothesis, which emphasized how the complicated financial structure underlying the capitalist economy generates business fluctuations and cycles. Many non-neo-classical economists have developed his idea following Taylor and O'Connell (1989) who proved that an economy would fall into a financial crisis when a decline in expected profit rates aggravated the financial condition of firms and increased households' preference for liquidity. Recent studies by Asada (2006) and Ninomiya and Sanyal (2009) have incorporated the dynamic equation of debt burden of firms into nonlinear economic dynamic models to indicate the financial condition. Following Rose (1969) and Okishio (1986), Ninomiya (2007c) adopted the loanable fund theory and discussed financial instability in an oligopolistic (or short run) economy. This paper examines financial instability in macroeconomics in the short and long run. We adopt the loanable fund theory to integrate neo-classical and Keynesian economics in order to evaluate the post-Keynesians' analysis of financial instability.

DOI： 10.20667/peq.46.4_25

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Authorship：Lead author   Language：Japanese   Publishing type：Research paper (scientific journal)   Publisher：Japan Society of Political Economy  

We studied the effects of the profit-sharing and nonprofit-sharing rules in a macrodynamic model of financial instability. The profit-sharing rule refers to the compensation system that gives a fraction of a firm's profits to its union or workers. Many people believed that the Japanese economy was strong because Japan adopted the "profit-sharing rule" (or the so-called Japanese management system) in the 1980s. However, Japan was trapped in a prolonged recession after the "bubble economy" collapsed in 1990. This led to the criticism of the Japanese management system. Many studies have discussed the effects of adopting the profit-sharing rule since Weitzman (1984) advocated the rule as a prescription for the stagflation in the 1970s. Weitzman (1985, 1987) analyzed the effects of the profit-sharing rule by using macro models of monopolistic competition. Fung (1989) and Sorensen (1992) considered the effects by a simple duopoly model. Freeman and Weitzman (1987) demonstrated that in the Japanese economy, bonuses perform the role of the profit-sharing rule in that bonuses are much more sensitive than wages to profits. Moreover, Fung (1989) suggested that the profit-sharing rule may be a crucial element in the Japanese economic success until the 1980s. Fanti and Manfredi (1998) investigated the effects of the profit-sharing rule on Goodwin's growth cycle model and demonstrated that the profit-sharing rule stabilizes the economy. In contrast, Steindl (1952) indicated that consumer demand would stagnate, since rising profit margins would imply an increasing share of profit. This would lead to a "stagnationist" regime requiring to consider the nonprofit-sharing rule. However, these literatures do not consider financial factors. Minsky (1986) introduced the financial instability hypothesis, proposing that the complicated financial structure underlying the capitalist economy generates business fluctuations and crises. Therefore, we discuss the notion of stagnationist regime in the macrodynamic model of financial instability and examine the effects and implications of the profit-sharing rule. We argue that the profit-sharing rule would make the economy unstable but that the instability does not depend on financial factors.

DOI： 10.20667/peq.47.3_58

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Language：Japanese   Publishing type：Research paper (scientific journal)   Publisher：Japan Society of Political Economy  

Minsky (1982; 1986) proposed a financial instability hypothesis, which emphasized that the complicated financial structure underlying the capitalist economy generates business fluctuations and cycles. Many non-neo-classical economists have developed his idea since Taylor and O'Connell (1985), who proved that an economy would fall into a financial crisis when a decline in expected profit rates aggravated the financial condition of firms and increased household preferences for liquidity. Recent works, for example, by Chiarella, Flaschel and Semmler (2001), Asada (2006; 2007), and Ninomiya and Sanyal (2009), incorporated the dynamic equation of the debt burden of firms into non-linear economic dynamic models to indicate financial conditions. On the other hand, Bernanke and Gertler (1989) proposed a financial accelerator hypothesis, which emphasized a strong affinity between assets and economic activity. Uchida (1987) and Ueda (2006) reformulated Taylor and O'Connell's idea by introducing the notion of risk aversion into the theory of portfolio selection under uncertainty and discussed financial instability. In fact, the stock of financial assets of households increased outstandingly and households preferred to invest risky assets during the bubble economy in Japan in the latter half of the 1980s. Uchida and Ueda's discussions are interesting, but their models are mainly comparative static analysis. This paper introduces Uchida and Ueda's idea into a macrodynamic model of financial instability in an oligopolistic (or short-run) economy. We construct a model by incorporating the dynamic equations of the debt burden of firms and financial assets of households and demonstrate financial instability. For example, the stock of financial assets increases when an economy is expanding. A decrease of risk aversion leads the investors to shift portfolio preferences toward bonds that are risky assets. As a result, the increase in wealth leads to a decrease in interest rate. The decrease in interest rate promotes investment demand. The dynamic system becomes unstable in this case. This paper also demonstrates that there is a closed orbit in the model by applying the Hopf bifurcation theorem.

DOI： 10.20667/peq.46.2_51

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Authorship：Lead author   Language：English   Publishing type：Research paper (scientific journal)  

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Language：English   Publishing type：Research paper (scientific journal)  

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Language：Japanese   Publishing type：Research paper (scientific journal)  

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Language：Japanese   Publishing type：Research paper (scientific journal)  

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Language：Japanese   Publishing type：Research paper (scientific journal)   Publisher：Japan Society of Political Economy  

Japan has been trapped in a prolonged recession since the collapse of the bubble economy. From soon after the collapse, financial crisis spread throughout the economy. Many banks, big and small, were driven to bankruptcy. Neoclassical economists have pushed for market-oriented economic reforms in pursuit of efficiency. Economic liberalization and reduced government restrictions have actually been global trends since the 1980s. Amidst the numerous of market-oriented economic reforms promoted by the Koizumi cabinet to cope with the severe recession, the most ambitious has been the plan to privatize the post-office saving service. However, opponents of the plan insist that the post-office saving service and guidance policy finance have counterbalanced the failings of the financial intermediaries during the post-bubble period. In other words, they argue that the public finance system has been useful to prevent further financial crisis. Minsky (1975), on the other hand, has reevaluated Keynes's theory and proposed the financial instability hypothesis. According to this hypothesis, the complicated financial structure underlying the capitalist economy generates business fluctuations. Minsky's ideas have been studied extensively by various authors. Taylor and O'Connell (1985) demonstrated that an economy might fall into financial crisis when declines in expected profit rates aggravate the financial condition of firms and increase the household preference for liquidity. Post-office savings, however, are a risk-less asset. If the funds return to financial markets through guidance policy finance, the economy might not fall into a financial crisis. The main purpose of this paper is to examine the effects of guidance policy finance in a macro-dynamic model of financial instability. Our results demonstrate that guidance policy finance stabilizes an economy which has been destabilized by the financial factor alone. In short, guidance policy finance can be a useful instrument to prevent financial instability. We also demonstrate a financial cycle by applying the Hopf bifurcation theorem in our model of an economy destabilized by the financial factor alone.

DOI： 10.20667/peq.43.3_76

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Language：Japanese   Publishing type：Research paper (scientific journal)   Publisher：Japan Society of Political Economy  

The Japanese economy has suffered from the prolonged recession since the bubble economy collapsed in 1990. The Japanese government adopted the traditional fiscal policy in the mid 90's but the economy did not recover. Neoclassical economists insist that the fiscal policy has no role to stimulate the economy and the marketoriented economic reform which pursues efficiency should be carried out. In fact, reduction of government regulations and promotion of economic liberalization have become a global trend since the 1980s. In Japan, the Koizumi cabinet has carried out economic reform. On the contrary, many Keynesian economists insist that the counter-cyclical fiscal policy has an effect to stabilize the economy. Asada (1987) developed a Kaldorian cycle model which incorporates the budget constraint of government and showed the counter-cyclical fiscal policy is effective to stabilize the economy under certain conditions in the model. Zhang (1990) showed the existence of limit cycles by applying Hopf bifurcation theorem in the model developed by Asada (1987). Ninomiya (2001.a) showed the countercyclical fiscal policy is effective to stabilize the economy even if the economy is in financial instability. However, these studies did not consider the debt burden of firms. In fact, the Japanese economy has suffered from the cumulative interest-bearing debt since the bubble economy collapsed. The problem of the non-performing loan is pointed out as one of the main reasons for the prolonged recession in Japan. Ninomiya (2001.b) took the dynamic equation of debt burden into account and showed a Minskian cycle in a nonlinear dynamic model. However, he did not examine the effect of the counter-cyclical fiscal policy. Asada (2003) and Ninomiya (2005) took the interest-bearing debt into account and discussed the financial instability and cycle. Furthermore, Ninomiya (2005) showed the interest rate target has an effect when the cumulative interest-bearing debt makes the economy unstable. However, both Asada (2003) and Ninomiya (2005) did not examine the effect of the counter-cyclical fiscal policy. In this paper, we shall take both the dynamic equation of debt burden and the budget constraint of government into account in a nonlinear dynamic model and discuss a financial cycle. Furthermore, we shall examine the effect of the counter-cyclical fiscal policy when the cumulative interest-bearing debt makes the economy unstable. The main result of this paper is that the counter-cyclical fiscal policy might not have an effect to make the economy stable when the cumulative interest-bearing debt makes the economy unstable. We might be able to call this situation "debt burden trap." This also means that we could not support the market-oriented economic reform based on neoclassical economics because of the failure of traditional fiscal policy based on Keynesian economics.

DOI： 10.20667/peq.42.3_96

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Language：Japanese   Publishing type：Research paper (scientific journal)   Publisher：経済理論学会  

The Japanese economy has suffered from the cumulative interest-bearing debt since the bubble economy collapsed. The non-performing loan is pointed out as one of the main reasons for the prolonged recession in Japan. The Bank of Japan adopted what we called the zero-interest rate policy and now adopts the quantitative easing policy. The Reserve Bank of New Zealand adopted the inflation target in 1990. Some economists insist that the Bank of Japan should adopt the inflation target. Ninomiya (2001.a) examined the effect of the interest rate target when the economy is in financial instability. Taylor and Dalziel (2002) presented a basic model of inflation target. However, they did not consider the interest-bearing debt. We can point out the cumulative interest-bearing debt as an aspect of financial instability. If the lenders' risk enhances by the increase in debt burden and so on, the interest rate would rise in spite of a recession. The rise in interest rate increases the interest payment burden. As a result, there is a possibility that firms can not help issuing a new debt for the purpose of the payment and so on. In other words, the cumulative interest-bearing debt occurs in the economy. Some economists took the interest-bearing debt into account and discussed the financial instability (Jarsulic (1990), Keen(1995)). However, the interest-bearing debt did not have an important role and the effect of monetary policy was not examined in their models. In this paper, we construct a macro dynamic model which considers the interest-bearing debt. The dynamic equation of debt burden considering the interest-bearing debt has an important role in our model. We discuss the financial instability by the cumulative interest-bearing debt and examine the effect of the interest rate target for the financial instability in the dynamic model. We also show a financial cycle by applying Hopf bifurcation theorem. The main result of this paper is that the interest rate target has an effect when the cumulative interest-bearing debt makes the economy unstable. The result means that the zero-interest rate policy is very useful if the cumulative interest-bearing debt produces the prolonged recession in Japan.

DOI： 10.20667/peq.41.4_90

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Language：Japanese   Publishing type：Research paper (scientific journal)  

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Language：Japanese   Publishing type：Research paper (scientific journal)  

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Language：Japanese   Publishing type：Research paper (scientific journal)  

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Language：Japanese   Publishing type：Book review, literature introduction, etc.   Publisher：経済理論学会  

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Language：Japanese   Publishing type：Book review, literature introduction, etc.   Publisher：Japan Society of Political Economy  

DOI： 10.20667/peq.52.2_92

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Language：Japanese  

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Language：Japanese  

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Language：Japanese   Publisher：Shiga University  

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Other Link： http://hdl.handle.net/10441/595

Language：Japanese   Publishing type：Article, review, commentary, editorial, etc. (trade magazine, newspaper, online media)   Publisher：毎日新聞社  

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Language：Japanese   Publishing type：Book review, literature introduction, etc.  

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Language：Japanese   Publisher：Shiga University  

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Other Link： http://hdl.handle.net/10441/659

Language：Japanese Book type：Scholarly book

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Language：Japanese Book type：Textbook, survey, introduction

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Language：Japanese Book type：Textbook, survey, introduction

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Presentation type：Oral presentation (invited, special)  

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Presentation type：Public lecture, seminar, tutorial, course, or other speech  

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Presentation type：Oral presentation (general)  

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Presentation type：Public lecture, seminar, tutorial, course, or other speech  

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Presentation type：Oral presentation (invited, special)  

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