Financial Instability in Japan: Debt, Confidence, and Financial Structure

Ninomiya, Kenshiro; Tokuda, Masaaki

doi:10.1108/s0161-723020170000032004

Cited by 6 publications

(14 citation statements)

References 18 publications

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“…This methodology solves the problem of exogeneity, as the financial crisis phases are integrated into a whole theory to explain the operation of capitalist economies. To avoid mathematical formalism, he insisted on delivering his theory via a narrative approach, which leaves more space for his successors to explore [ 82 , 83 , 84 ], etc.…”

Section: Review Of the Main Research Methods Of Systemic Riskmentioning

confidence: 99%

“…The main methods used are the Copula model to simulate the joint distribution of risk factors, and the introduction of option pricing models and multivariate extreme value theory, or principal factor analysis to extract key factors using the DCC-GARCH model to model the correlation between multiple assets [ 8 ], and to establish multivariate quantitative indicators. Furthermore, to verify the economic structure variation as systemic risk takes place, VAR is usually adopted [ 82 , 83 , 84 ] tc.…”

Section: Review Of the Main Research Methods Of Systemic Riskmentioning

confidence: 99%

“…Moreover, by following a centre-periphery structure, the model explains how financial movements in the periphery associate with international financial markets’ movements and external vulnerability. Recent research in this field mainly focused on empirical research to support and verify FIH in different economies [ 82 , 83 , 84 ].…”

Section: Progress In Systemic Risk Researchmentioning

confidence: 99%

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A Review of Micro-Based Systemic Risk Research from Multiple Perspectives

Bai

Sun

et al. 2020

Entropy

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The Covid-19 pandemic has brought about a heavy impact on the world economy, which arouses growing concerns about potential systemic risk, taking place in countries and regions. At this critical moment, it makes sense to interpret the systemic risk from the perspective of the financial crisis framework. By combing the latest research on systemic risks, we may arrive at some precautions relating to the current events. This literature review verifies the origin of systemic risk research. By comparing the retrieved and screened systemic literature with the relevant research on the financial crisis, more focus on the micro-foundations of systemic risk has been discovered. Besides, the measurement methods of systemic risks and the introduction of interdisciplinary methods have made the research in this field particularly active. This paper synthesizes the previous research conclusions to find the appropriate definition of systemic risk and combs the research literature of systemic risk from two lines: Firstly, conducting the division according to the sub-branch fields within the financial discipline and the relevant interdisciplinary research methods, which is helpful for scholars within and outside the discipline to have a more systematic understanding of the research in this field. Secondly predicting the research direction that can be expanded in this field.

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Section: Review Of the Main Research Methods Of Systemic Riskmentioning

confidence: 99%

Section: Review Of the Main Research Methods Of Systemic Riskmentioning

confidence: 99%

Section: Progress In Systemic Risk Researchmentioning

confidence: 99%

See 1 more Smart Citation

A Review of Micro-Based Systemic Risk Research from Multiple Perspectives

Bai

Sun

et al. 2020

Entropy

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“…Ninomiya (2007Ninomiya ( )(2018 considered these factors in a Kaldorian business cycle model and discusses financial instability as a cycle. Ninomiya and Tokuda (2017) demonstrated that Japan's financial structure has been fragile since the mid-1990s by expanding upon the work of Taylor and O'Connell (1985) and applying VAR analysis. Ninomiya and Tokuda (2012) demonstrated that Korea's financial structure stabilized after the Asian monetary crisis On the contrary, Kregel (2008) does not regard the subprime mortgage crisis as traditional Minskian financial instability.…”

Section: Introductionmentioning

confidence: 99%

Financial Structure, Cycle, and Instability

Ninomiya

2021

Preprint

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The subprime loan mortgage crisis has revived scholarly interest in Minsky’s financial instability hypothesis. The related mathematical models present two types of Minskian financial structures. We construct macrodynamic models that consider both structures and discuss financial instability and cycles. We also demonstrate that one of the financial cycles occurs when a real factor stabilizes the economy. The burden of interest-bearing debt is an important determinant of the cycle. We posit that the escalating financial fragility in this cycle is a more appropriate interpretation of the Minskian financial structure that refers to hedging, speculative and Ponzi behaviors. We further demonstrate that another financial structure destabilizes the economy. If the instability occurs at the point of fragility, then the economy may deteriorate into financial crisis. Fragility then becomes instability.JEL classifications: E12, E32, E33, E43

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“…However, we ascertain that the interest rate does not depend on the labour share, since we adopt the Eq. (20).On the other hand,Ninomiya (2006),Ninomiya and Tokuda (2017) verify that the interest rate is determined by the bond market. The following equation determines the interest rate:…”

mentioning

confidence: 98%

Profit sharing, labour share and financial structure

Ninomiya

Takami

2018

Evolut Inst Econ Rev

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In this paper, we study the effects of the Profit-Sharing rule on an oligopolistic economy. Many believed that the Japanese economy was strong because Japan adopted the Profit-Sharing rule (or the Japanese management system) in the 1980s. However, Japan was trapped in a prolonged recession after the collapse of the bubble economy in the 1990s. The Japanese management system and its regulated financial system have come under criticism as factors of the crisis. We derive a condition that a firm and its union adopt the Profit-Sharing rule voluntarily and construct a macrodynamic model of financial instability. We demonstrate in this study that the Profit-Sharing rule in Japan further stabilises the economy when the financial structure of the economy is already stable.

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Financial Instability in Japan: Debt, Confidence, and Financial Structure

Cited by 6 publications

References 18 publications

A Review of Micro-Based Systemic Risk Research from Multiple Perspectives

A Review of Micro-Based Systemic Risk Research from Multiple Perspectives

Financial Structure, Cycle, and Instability

Profit sharing, labour share and financial structure

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