Silviase/jgov_v1.4_full_ann huggingface dataset:
（一般会計からの繰入金の額）……67,751 百万円

(繰入れの理由)

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登記特別会計が登記情報管理事務のみに関するものとしなかったのは，登記情報管理事務と登記の審査に関する事務は密接不可分の関係にあり両者の経費は実質的関連性が強いこと，登記所には少人数規模のものが多く，これらの庁の職員は両者の事務を行っていること，及び同一施設の中で両者の事務が行われていること等の事情から，両者の経費は一体として経理することが相当であると認められるからですが，登記の審査に関する事務に要する経費については，この事務の利用者が負担する登録免許税の前身である登録税，登記料には手数料的要素が含まれると解されていた沿革をも考慮され，従来どおり一般会計の負担とし，同会計から繰り入れることとされたものです。

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Monetary Policy and the Liquidity Trap

Simulations using a Short-Run Macro Econometric Model of the Japanese Economy

By

Masahiro Hori, Toshiyuki Tanabe, Makoto Yamane and Daiju Aoki

December 2002

Economic and Social Research Institute

Cabinet Office

Tokyo, Japan
# Monetary Policy and the Liquidity Trap Simulations using a Short-Run Macro Econometric Model of the Japanese Economy

by

Masahiro Hori, Toshiyuki Tanabe, Makoto Yamane and Daiju Aoki $ ^{*} $

December 2002

Please address correspondence to:

Masahiro Hori, ESRI-CAO, Japanese Government
## Abstract:

In this paper, we tried to examine empirically the constraints to monetary policy posed by the zero-lower bound on nominal interest rates. To evaluate numerically the views expressed on policy effectiveness, we run several policy simulations, making full use of the two different versions of the ESRI Short-Run Macroeconometric Model, i.e. the backward-looking version and the forward-looking version. Though the monetary transmission mechanisms in the real world may be far more complicated than those depicted in the compact model, the authors believe that we could learn (or obtain a new understanding of) the following lessons from our model simulations.

1) The effectiveness of monetary policy in Japan seems to have declined through the 1990s in its backward-looking settings, as suggested by the theory of the liquidity trap.

2) However, with forward-looking agents, monetary policy still may be effective in fighting deflation. There are (at least) two distinct possible forward-looking responses to the permanent monetary expansions under zero interest rates, i.e. bull and bear equilibrium, depending on the people’s knowledge or their belief in long-run monetary neutrality.
### I. Introduction

Following the collapse of the asset price bubble in early 1990, Japan’s growth steadily deteriorated through the first half of the 1990s, and has been generally weak since then. Price inflation followed the economy downward, falling below zero in the mid-1990s. In response, money market rates in Japan have been consistently below 0.5 percent; the Bank of Japan claims that it can do no more, yet the economy is sliding deeper into recession.

The continued stagnation of the Japanese economy, despite very low interest rates, is surely one of the major dilemmas of macroeconomic policy around the world today. Studying Japan’s experience in the first half of the 1990s, Ahearne et al (2002) draw some lessons for situations in which inflation and interest rates have fallen close to zero, and the risk of deflation is high. Krugman (1998) argues that Japan was stuck in a “liquidity trap” in late 1990s. It is time to reexamine the theory of the liquidity trap, which has turned out to be relevant.

The objective of this paper is to examine the constraints to monetary policy posed by the zero-lower bound on nominal interest rates. Though several leading economists including Krugman advocate the use of non-conventional means of monetary stimulus, almost all analysts would agree that once the zero bound is reached, re-activating the economy becomes more difficult and more uncertain. Considering the necessity of policy evaluation even under those difficult and uncertain circumstances, this paper presents some simulation results of Japanese monetary expansion using the ESRI Short-Run Macroeconometric Model of the Japanese Economy, developed by the Economic and Social Research Institute (ESRI), Cabinet Office of the Japanese government $ ^{1} $ . In each simulation, growth rate of monetary aggregates (M2+CD) are exogenously raised/lowered for several quarters to reach a certain level of monetary expansion/contraction. Given the exogenous path of money supply, short-term interests rates are derived from a reversed money demand function $ ^{2} $ , respecting zero bound on interest rates by specifying that the rate is the maximum of zero and the rate implied by the reversed function.

We use two versions of the ESRI model—the traditional backward-looking version and the forward-looking version at its testing stage—in our monetary expansion experiments. Simulation results using the traditional version indicate that the effectiveness of monetary policy in Japan declined through the 1990s in its backward-looking setting, as suggested by the zero bound and the liquidity trap theory. However, with forward-looking agents, monetary policy may be effective to fight deflation, even with extraordinarily interest-elastic money demand, provided that agents believe monetary neutrality will hold in the long run.