HOME > Faculty > Faculty Members ＞ WATANABE, Tsutomu (Professor) Faculty Members Visiting Members Former Faculty    Members Institute of Economic Research Hitotsubashi University 2-1 Naka, Kunitachi City, Tokyo 186-8603, JAPAN Tel +81 42 580 8327 Fax +81 42 580 8333   WATANABE, Tsutomu   Professor / Contemporary Economies Specialization International Finance, Macroeconomics URL of personal web http://www.ier.hit-u.ac.jp/~ifd/index.html Education 1982 1992 B.A. (Economics) University of Tokyo Ph.D. (Economics) Harvard University Positions held 1999 2002 Associate Professor, Institute of Economic Research, Hitotsubashi University Professor, Institute of Economic Research, Hitotsubashi Univ Previous research My major research areas are the mechanisms determining prices and optimal monetary policy. In particular, I have taken the opportunity provided by the emergence of deflation in Japan to concentrate on the mechanisms of deflation. Taking the pioneering paper by Paul Krugman published in 1998 as my point of departure, I showed in a paper published in 2001 that it is possible to present Krugman’s hypothesis in a dynamic structural model widely used in macroeconomics and that, with a zero bound to interest rates, the optimal monetary policy rule is one based on inflation targeting with history dependence. This study provided evidence of the type of liquidity trap described by Keynes in a contemporary macroeconomic framework and became the basis for numerous subsequent studies in this field. Current research projects In a paper presented at an NBER conference in 2004, I showed that at the end of the 1990s, Japan’s natural interest rate had temporarily become negative. This being the first study to confirm Krugman’s hypothesis, I was asked to present it as an invited paper at conferences organized by the Federal Reserve Bank and the Bank for International Settlements. Based on these research achievements, I became the leader of a five-year JSPS Grant-in-Aid for Creative Scientific Research project commenced in 2006 on “Understand Inflation Dynamics of the Japanese Economy: An Approach Integrating Microeconomic Behaviors and Aggregate Fluctuations” and have been involved in the establishment of the Research Center for Price Dynamics, which aims at explaining inflation dynamics based on firms’ price setting behavior. (Details of the project can be found at: http://www.ier.hit-u.ac.jp/~ifd/). ◎Keywords monetary policy, optimal monetary policy rule, inflation dynamics, price stickiness, inflation persistence. Contact | Sitemap | Links | Hitotsubashi University official site Copyright (C) 2007 by Institute of Economic Research. All rights reserved.