Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

Bank of Japan : (Research Paper) Welfare Analysis of Policy Measures for Financial Stability

03/01/2013 | 02:29am US/Eastern

March 1, 2013
Ko Munakata*
Koji Nakamura**
Yuki Teranishi***

Abstract

We introduce the financial market friction through the search and matching in the loan market into a dynamic stochastic general equilibrium (DSGE) model. We reveal that the second order approximation of social welfare includes the terms relating credit, such as credit market tightness, the volume of credit, and a loan separation rate, in addition to the inflation rate and the output gap under the financial market friction. Our analytical result justifies the reason why the optimal policy should take the credit variation into account. We introduce a monetary policy and other policy measures for the financial stability into the model. The optimal outcome is achieved through the monetary and other policy measures by taking into account not only price stability but also financial stability.

We thank Kosuke Aoki for valuable suggestions and comments. Views expressed in this paper are those of the authors and do not necessarily reflect the official views of the Bank of Japan.

* Oita Branch
E-mail : kou.munakata@boj.or.jp
** Financial System and Bank Examination Department
E-mail : kouji.nakamura@boj.or.jp
*** Financial System and Bank Examination Department
E-mail : yuuki.teranishi@boj.or.jp
Notice

Papers in the Bank of Japan Working Paper Series are circulated in order to stimulate discussion and comments. Views expressed are those of authors and do not necessarily reflect those of the Bank.
If you have any comment or question on the working paper series, please contact each author.
When making a copy or reproduction of the content for commercial purposes, please contact the Public Relations Department (post.prd8@boj.or.jp) at the Bank in advance to request permission. When making a copy or reproduction, the source, Bank of Japan Working Paper Series, should explicitly be credited.

distributed by
React to this article
Latest news
Date Title
<1m ago D B REALTY : Fighting developers turn friends for Worli SRA project that is likely to fetch Rs 8,000cr
<1m ago Findings from Siemens Reveals New Findings on Forensic Science [Development of application protocols of the Emit ® II Plus 6-Acetylmorphine Assay on...
<1m ago "Clamping Device for a Coiled Metal Web Cutter" in Patent Application Approval Process
<1m ago "Multi-Panel Display Apparatus and Manufacturing Method Thereof" in Patent Application Approval Process
<1m agoDJNorway Central Bank to Decide Oil Fund Exclusions
1m ago ARMOUR : Confirms Hawk Investments Will Make Mandatory Offer
1m ago Britain says recovers further 1.36 billion pounds from Icesave collapse
2m ago CATERPILLAR : buys land by plant on West Plains
2m ago OVERSTOCK : Hatch outlines tech-growth agenda
2m ago SAMSUNG ELECTRO MECHANICS : "Camera Module" in Patent Application Approval Process
Latest news
Advertisement
Hot News 
DIXONS CARPHONE : Merged Dixons Carphone to axe 400 jobs
IENERGIZER : Shares Fall As Interim Profit More Than Halves
MARTINCO : Water bill warning for Welsh landlords
INCADEA : Dealertrack Agrees GBP121.6 Million Takeover Bid For Incadea
EVOCUTIS : Shares Surge On Brazil Tungsten Stake Acquisition
Most Read News
1h ago Wall Street climbs on oil boost in wake of Fed statement
1d ago HONEYWELL : Patent Issued for System and Method for Reducing Errors in a Resonator Fiber Optic Gyroscope
1d ago INSYDE SOFTWARE : "Method of Promptly Starting Windowed Applications Installed on a Mobile Operating System and Device Using the Same" in Patent Application Approval...
1d ago SONY : Patent Issued for Capturing Playback Key Events in BD Players
7h ago CHINA VANKE : home prices fall in November, threaten economic growth
Most recommended articles
1m ago Britain says recovers further 1.36 billion pounds from Icesave collapse
8m ago Japan won't reach its April inflation target - JP Morgan
11m ago Pimco expects global growth to accelerate in 2015 between 2.5-3 percent
12m agoDJTreasury Bonds Sell Off as Global Stocks Strengthen on Fed
13m ago US Dollar Once Again Looks like a Buy versus Euro, Major Currencies
Dynamic quotes  
ON
| OFF