This paper examines the unconventional monetary policies of the Bank of Japan from 2002 to 2019 with a focus on open market operations. We apply a principal component analysis to investigate the complexity of monetary policy. Our results identify four principal components that explain the variance of measures taken by the Bank of Japan and its operations of various facilities: asset purchase measures including Japanese Government Bonds (JGBs), Exchange-Traded Funds (ETFs), Japanese Real Estate Investment Trusts (J-REITs), and three different liquidity supply measures. Complexity differs substantially among different governorships of Fukui, Shirakawa (most complex), and Kuroda. We derive some conclusions from the increased complexity with implications for the economy.

The calculation of government statistics faces multiple challenges in many countries, of which Japan may have the most acute. This paper examines comprehensive statistics reforms in Japan, especially regarding GDP and related statistics, to identify and rectify the problems. This paper then explains the recent revelation of serious errors in vital wage statistics caused by mismanagement in the Ministry of Health, Labor and Welfare, and examines their microeconomic and macroeconomic impacts. These statistical errors led to a crisis in public relations, as well as to potentially jeopardizing the functioning of the system of government statistics.

In this paper we investigate the effect of aging population on property (land) prices. A theory of very-long-run portfolio choice is developed for a transition economy from young and growing to rapidly aging population and applied to estimate property price inflation in Japanese municipal markets. The results are stunning. The simulation results in which income factors are assumed to be fixed at the 2005-10 growth level suggest that the average residential property price (land price) in the Japanese municipalities may decrease by as much as 19 percent from the present to 2020, 24 percent to 2030, and 32 percent to 2040.

This paper first explains why the financial crisis of 2007–08 started in the United States, in particular, in the sub-prime mortgage market, a periphery of their financial markets. Agency problems in complex securitization and investors' “responsibility avoidance” behavior are argued to be key factors in the sub-prime mortgage meltdown. It then examines the collapse of global financial markets and the erosion of market confidence that followed, and measures taken by governments and central banks to save the financial system. Finally, the paper explores possible safety nets that may prevent another financial crisis: private-sector capital insurance, public–private partnership capital insurance (a version of catastrophe insurance), and contingent capital.

When the Bank of Japan ended its Quantitative Easing Policy on 9 March 2006, it also issued a document entitled “The Introduction of a New Framework for the Conduct of Monetary Policy” to explain its policy stance. “Fundamental uncertainty” (the existence of “unknown unknowns”) is the most important consideration in this New Policy Framework. The Framework has two basic principles: a Two-Perspective Strategy and the collective wisdom of “agreeing to disagree.”

This paper claims that a scarcity of profitable private investment opportunities starting in the early 1990s or even earlier is a fundamental cause of Japan's prolonged economic stagnation during the 1990s and early 2000s. It presents evidence that the economy has been largely at a private equilibrium (i.e., at its optimum for the physical and human capital Japan has inherited from the past), rather than in a disequilibrium constrained by the binding zero bound of nominal interest rates and/or widespread liquidity constraints. Consequently, aggressive aggregate demand policies, particularly zero nominal interest rates coupled with aggressive quantity easing, are ineffective means for escaping from Japan's current economic stagnation and deflation. Reflation policies based on money financing alone are unlikely to solve the problem because of their strong distributional side effects and limited effects on employment and output. The paper concludes that although exchange rate policies are more promising than other aggregate demand policies, their political feasibility is questionable, and aggregate demand policies are unlikely to be effective without new structural initiatives to increase investment. Although the Japanese economy is at a private equilibrium, it is far from its social optimum. Socially desirable investment opportunities have not been exploited fully in Japan, mainly because most of them are unprofitable for the private sector. Socially oriented investment trusts are proposed as one way to encourage such investment.

This paper has three parts. First, we compile a new industry-by-industry data set of the Japanese economy in which information and communication technology (ICT) stocks are explicitly estimated and labor inputs are disaggregated with respect to age and education. Second, we investigate the effect of ICT on various labor inputs and discern for which labor inputs ICT is able to substitute. Third, we estimate the contribution of capital stocks, including ICT, and various labor inputs to the value-added growth of the Japanese economy in the 1980s and 1990s and explore the factors that determine technological progress. We find ICT capital stocks are an important substitute for young workers with low education levels. These results strongly suggest that ICT investment is an effective way to counter the prospective shortage of young workers in Japan. In contrast, we find no compelling evidence of productivity-enhancing ICT externality. On the contrary, our results suggest that ICT has a negative indirect effect on productivity. The past technological and managerial strengths of Japanese firms, which have been based on workers' learning by doing in the workplace, may no longer be advantages as knowledge management systems improve and become easily transferred across international borders.