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
Recommend:
0

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
Recommend :
0
React to this article
Latest news
Date Title
1m ago PJD PJ DEVELOPMENT BHD : General meetings: notice of meeting
1m ago CSR : Electric Locomotives Exporting to South Africa are Available...
1m ago TAWANA RESOURCES N L : Ministerial Approval to Commence MDA Negotiations | 255.58 KB
1m ago CSR : Got the Metro Order of Navi Mumbai, India
1m ago PACIFIC ALLIAN ORD USD0 01 : Director Dealing
3m ago UNITED STATES STEEL : U.S. Steel Canada moving quickly to sell Hamilton assets
4m ago APPLE : Samsung to launch new phone in China before Apple
5m ago NBA Superstar Derrick Rose Donates $1 Million To After School Matters
6m ago APFT BHD : mulls chartered flight services
6m ago PLANET METALS : Change in Directors' Interest Laurie Johnson 24 September 2014
Latest news
Advertisement
Hot News 
DIXONS CARPHONE : UK's EE to buy 58 stores from Phones 4u for 2.5 million pounds
REGENERSIS : *panmure cuts regenersis price target to 403 (502) pence - 'buy'
Lipocine to Host Conference Call and Webcast to Discuss Top-Line Results From the Phase 3 Study of LPCN 1021
ASCENA RETAIL : Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"). (form 10-K)
NORTHBRIDGE INDUSTRIAL SERVICES : Profit Up; Raises Funds In Placing As It Buys Rest Of Tasman
Most Read News
4h ago ALCO STORES : Nasdaq stocks posting largest volume increases
3h ago STARBUCKS COFFEE JAPAN : buying full control of Japan unit for $914 million
3h ago HOME DEPOT : data breach triggers fraudulent transactions: WSJ
4h ago COSMO COMMUNICATIONS : Cosmopolitan disses its former centerfold in Senate race
3h ago New U.S. tax rules chill 'inversion' deal-making; shares dive
Most recommended articles
5d ago Main Italian lenders took 23 billion euros of cheap ECB cheap
3m ago UNITED STATES STEEL : U.S. Steel Canada moving quickly to sell Hamilton assets
9m agoDJAsian Shares Fall on Global Growth Worries
9m agoDJSmart & Final IPO Prices at Low End of Range
17m ago Japan September flash manufacturing PMI falls to 51.7, output at six-month high
Dynamic quotes  
ON
| OFF