Masao Kumamoto - Academia.edu (original) (raw)
Papers by Masao Kumamoto
Currency substitution is a phenomenon that domestic residents use a foreign currency as a medium ... more Currency substitution is a phenomenon that domestic residents use a foreign currency as a medium of exchange. It is a common feature of many developing and transition countries. Many literatures concern the role of currency substitution on the effects of monetary policy and on the real exchange rate fluctuations. In this paper, we analyze the extent to which the degree of currency substitution influences on the effects of monetary policy. Especially, we will focus on the role of real exchange rate in the transmission of monetary policy. To attain this objective, we develop a small open economy general equilibrium model which has a standard New Keynesian framework. Our model also assumes incomplete financial markets in which risk sharing conditions and uncovered interest rate parity condition do not hold and net foreign assets play a role. We derive a tractable model in terms of the output gap, domestic inflation rate and the real exchange rate gap. Our impulse responses and uncondit...
In the present paper, we estimate the relative money demand function as a proxy of the degree of ... more In the present paper, we estimate the relative money demand function as a proxy of the degree of currency substitution in seven sample countries by using panel time series methods, namely the fully modified and dynamic OLS approaches. Our sample period of 2002Q1 to 2011Q4 covers the period during which the economies in the sample countries were stable and the U.S. dollar and euro were depreciating in the wake of the global financial crisis. The presented empirical analyses show that there exists a long -run relationship between relative money demand and the nominal interest rate differential. We also find that the nominal interest rate differential has a positive significant effect on the degree of currency substitution. Specifically, the degree of currency substitution decreases when the relative opportunity cost of holding the foreign currency increases, which is consistent with the existence of de-dollarization or de-euroization.
This paper investigates empirically whether a bank lending channel of monetary policy existed in ... more This paper investigates empirically whether a bank lending channel of monetary policy existed in Japan from 2000 to 2012. We extend Bernanke and Blinderi¯s model and estimate it with the Bayesian method to deal with the identification problem. In particular, we focus on the differential effects of quantitative easing monetary policy regardless of bank size (City banks vs. Regional banks) and firm size (all enterprises vs. small and medium-sized enterprises). We find that the semi-elasticities of loan supply with respect to bank lending rate are larger than those of loan demand, implying a need for larger decline in bank lending rate to stimulate loan demand following an increase in loan supply. We also find that the semi-elasticities of both loan demand and loan supply are almost the same with respect to bank lending rate regardless of bank and enterprise size. Bayesian impulse response function analyses show an increase in bank lending but a decline in spread following quantitative...
This paper investigates empirically whether the bank lending channel of monetary policy existed i... more This paper investigates empirically whether the bank lending channel of monetary policy existed in Japan from 2000 to 2012. We employ the sign restrictions VAR approach to deal with the identification problem. In particular, we focus on the differential effects of a quantitative easing monetary policy regardless of bank (City banks vs. Regional banks) and firm (all enterprises vs. small and medium-sized enterprises－SMEs) size. Our impulse response function analyses show that following a quantitative easing monetary policy shock, the lending of Regional banks increases more than that of City banks, and the bank lending rate of Regional banks declines in a larger magnitude. Moreover, the responses of output to reserve supply are larger in Regional banks than that in City banks. Our variance decomposition analyses show that a larger proportion of the forecast error variance in the bank lending of Regional banks relative to City banks, and a larger proportion of the forecast error varia...
Asian Economic and Financial Review
The development and the integration of the bond market is becoming an important policy issue in A... more The development and the integration of the bond market is becoming an important policy issue in ASEAN countries. We investigate government bond market integration in four ASEAN countries. We first decompose yields in ASEAN countries and the United States into global and regional factors using the approximate dynamic factor model. Next, we employ the dynamic conditional correlation method to find that regional markets have been integrated in the sense that their yields are highly and positively correlated with the common regional factor. We also find that the correlation between the global factor and the yield has different signs in different countries. Therefore, we use the pooled mean estimation method to investigate the determinants that make the correlation positive in some countries and negative in others. We find that public interest payments is an important determinant and discover a threshold that depends on public interest payments. The global factor has a significantly negative effect on the yield spread when public interest payments are above the threshold value. From above results, we can conclude that market discipline has been operating in the four ASEAN government bond markets in the sense that investors discriminate between the creditworthiness of the governments' bonds by focusing on the public interest payments. Contribution/ Originality: This study is one of very few studies which have investigated the government bond market integration by considering the correlation between the yield in each country and the regional or the global factor. We also investigate the determinants of the correlation between the yield and the global factor.
Applied Economics and Finance, Jan 10, 2017
This paper investigates empirically whether the bank lending channel of monetary policy existed i... more This paper investigates empirically whether the bank lending channel of monetary policy existed in Japan from 2000 to 2012. We employ the sign restrictions VAR approach to deal with the identification problem. In particular, we focus on the differential effects of a quantitative easing monetary policy regardless of bank (City banks vs. Regional banks) and firm (all enterprises vs. small and medium-sized enterprises-SMEs) size. Our impulse response function analyses show that following a quantitative easing monetary policy shock, the lending of Regional banks increases more than that of City banks, and the bank lending rate of Regional banks declines in a larger magnitude. Moreover, the responses of output to reserve supply are larger in Regional banks than that in City banks. Our variance decomposition analyses show that a larger proportion of the forecast error variance in the bank lending of Regional banks relative to City banks, and a larger proportion of the forecast error variance in the bank lending to SMEs relative to all firms can be explained by monetary policy shock. Similarly, the loans of Regional banks have a larger impact on output than the loans of City banks, and the loans to SMEs have a larger impact on output than the loans to all firms. Moreover, output is more affected by the reserve supply to Regional banks than to City banks. These results together indicate that a quantitative easing policy has a greater impact on the real economy through the lending of Regional banks.
Applied Economics and Finance, Nov 12, 2015
This paper investigates empirically whether a bank lending channel of monetary policy existed in ... more This paper investigates empirically whether a bank lending channel of monetary policy existed in Japan from 2000 to 2012. We extend Bernanke and Blinder's model and estimate it with the Bayesian method to deal with the identification problem. In particular, we focus on the differential effects of quantitative easing monetary policy regardless of bank size (City banks vs. Regional banks) and firm size (all enterprises vs. small and medium-sized enterprises). We find that the semi-elasticities of loan supply with respect to bank lending rate are larger than those of loan demand, implying a need for larger decline in bank lending rate to stimulate loan demand following an increase in loan supply. We also find that the semi-elasticities of both loan demand and loan supply are almost the same with respect to bank lending rate regardless of bank and enterprise size. Bayesian impulse response function analyses show an increase in bank lending but a decline in spread following quantitative easing monetary policy shock, which is evidence of the bank lending channel. Variance decomposition analyses show that while a large proportion of forecast error variance in bank loans is explained by monetary policy shock, a large proportion of forecast error variance in spread is explained by loan supply shocks. These results also comprise evidence of bank lending channel. However, we find no evidence that loans of smaller banks and loans to smaller firms are more sensitive to monetary policy.
Applied Economics and Finance
This paper investigates empirically whether a bank lending channel of monetary policy existed in ... more This paper investigates empirically whether a bank lending channel of monetary policy existed in Japan from 2000 to 2012. We extend Bernanke and Blinder's model and estimate it with the Bayesian method to deal with the identification problem. In particular, we focus on the differential effects of quantitative easing monetary policy regardless of bank size (City banks vs. Regional banks) and firm size (all enterprises vs. small and medium-sized enterprises). We find that the semi-elasticities of loan supply with respect to bank lending rate are larger than those of loan demand, implying a need for larger decline in bank lending rate to stimulate loan demand following an increase in loan supply. We also find that the semi-elasticities of both loan demand and loan supply are almost the same with respect to bank lending rate regardless of bank and enterprise size. Bayesian impulse response function analyses show an increase in bank lending but a decline in spread following quantitative easing monetary policy shock, which is evidence of the bank lending channel. Variance decomposition analyses show that while a large proportion of forecast error variance in bank loans is explained by monetary policy shock, a large proportion of forecast error variance in spread is explained by loan supply shocks. These results also comprise evidence of bank lending channel. However, we find no evidence that loans of smaller banks and loans to smaller firms are more sensitive to monetary policy.
Applied Economics and Finance
This paper investigates empirically whether the bank lending channel of monetary policy existed i... more This paper investigates empirically whether the bank lending channel of monetary policy existed in Japan from 2000 to 2012. We employ the sign restrictions VAR approach to deal with the identification problem. In particular, we focus on the differential effects of a quantitative easing monetary policy regardless of bank (City banks vs. Regional banks) and firm (all enterprises vs. small and medium-sized enterprises－SMEs) size. Our impulse response function analyses show that following a quantitative easing monetary policy shock, the lending of Regional banks increases more than that of City banks, and the bank lending rate of Regional banks declines in a larger magnitude. Moreover, the responses of output to reserve supply are larger in Regional banks than that in City banks. Our variance decomposition analyses show that a larger proportion of the forecast error variance in the bank lending of Regional banks relative to City banks, and a larger proportion of the forecast error varia...
International Journal of Economics and Finance, 2017
In this study, we empirically investigate how currency substitution transmits foreign monetary po... more In this study, we empirically investigate how currency substitution transmits foreign monetary policy shocks to domestic countries and evaluate how the central bank respond to real exchange rate movements in three inflation-targeting Latin American countries under currency substitution, namely Chile, Mexico and Peru, between 2000 and 2011. Our model is based on a small open economy dynamic stochastic general equilibrium model that incorporates currency substitution and incomplete financial markets, and we estimate it by using Bayesian estimation techniques. Our empirical results are as follows. First, the degree of currency substitution is higher in Mexico, while it is negligible in Chile and Peru, which reflects the slight differences in the parameter values capturing the preference for the domestic currency among these countries. Second, the estimated coefficients of the real exchange rate gap in the monetary policy rule are high, meaning that the central banks in these countries ...
International Journal of Economics and Financial Issues, Aug 21, 2014
This study investigates the impacts of the degree of currency substitution on nominal exchange ra... more This study investigates the impacts of the degree of currency substitution on nominal exchange rate volatility in seven countries (Indonesia, the Philippines, the Czech Republic, Hungary, Poland, Argentina, and Peru). We use the Threshold ARCH model to consider the ratchet effect of currency substitution and sample periods in the 2000s, during which time the economies of the sample countries stabilized, while the U.S. dollar and euro depreciated against other major currencies following the recent global financial crisis. The presented empirical analyses show that the degree of currency substitution has significant positive effects on the conditional variance of the depreciation rate of the nominal exchange rate in most sample countries. Moreover, a shock to the depreciation rate of the nominal exchange rate has asymmetric effects on the conditional variance, depending on the sign. One possible explanation for these differential effects is the existence of the ratchet effect of currency substitution.
The purpose of this paper is to investigate (i) at first, whether there exists persistent inflati... more The purpose of this paper is to investigate (i) at first, whether there exists persistent inflation differentials among euro area countries, namely, whether inflation rates among euro area courtiers have converged or not, (ii) next, if there exist persistent inflation differentials among euro area countries, we will investigate the causes of the inflation differentials, especially, we focus on the inflation persistence components (backward-looking price setting behavior) or cyclical components (output gap), (iii) at last, if the causes of inflation are different among countries, whether these differences lead to different effects of monetary policy has. We find that (i) overall euro area inflation rates are in a process of convergence, but crosscountry dispersion in inflation rates across countries has not been eliminated, (ii) the differences in the inflation persistence and the sensitivity of inflation to cyclical components would contribute to the inflation differentials among euro area countries, (iii) there exist the differences in monetary policy effects among these countries, which are consistent with the differences of inflation persistence and sensitivity of inflation to cyclical components across countries.
The purpose of this paper is to investigate (i) at first, whether there exists persistent inflati... more The purpose of this paper is to investigate (i) at first, whether there exists persistent inflation differentials among euro area countries, namely, whether inflation rates among euro area courtiers have converged or not, (ii) next, if there exist persistent inflation differentials among euro area countries, we will investigate the causes of the inflation differentials, especially, we focus on the inflation persistence components (backward-looking price setting behavior) or cyclical components (output gap), (iii) at last, if the causes of inflation are different among countries, whether these differences lead to different effects of monetary policy has. We find that (i) overall euro area inflation rates are in a process of convergence, but cross-country dispersion in inflation rates across countries has not been eliminated, (ii) the differences in the inflation persistence and the sensitivity of inflation to cyclical components would contribute to the inflation differentials among e...
The purpose of this paper is to investigate (i) at first, whether there exists persistent inflati... more The purpose of this paper is to investigate (i) at first, whether there exists persistent inflation differentials among euro area countries, namely, whether inflation rates among euro area courtiers have converged or not, (ii) next, if there exist persistent inflation differentials among euro area countries, we will investigate the causes of the inflation differentials, especially, we focus on the inflation persistence components (backward-looking price setting behavior) or cyclical components (output gap), (iii) at last, if the causes of inflation are different among countries, whether these differences lead to different effects of monetary policy has. We find that (i) overall euro area inflation rates are in a process of convergence, but cross-country dispersion in inflation rates across countries has not been eliminated, (ii) the differences in the inflation persistence and the sensitivity of inflation to cyclical components would contribute to the inflation differentials among e...
Information Processing Letters, 2012
We study the problem of embedding an unweighted complete binary tree into a line with low distort... more We study the problem of embedding an unweighted complete binary tree into a line with low distortion. Very recently, Mathieu and Papamanthou (2008) [9] showed that the inorder traversal of the complete binary tree of height h gives a line embedding of distortion O (2 h), and conjectured that the current lower bound of Ω(2 h h) increases to Ω(2 h), i.e., the upper bound of O (2 h) is best possible. In this paper, we disprove their conjecture by providing a line embedding of the complete binary tree of height h with optimal distortion Θ(2 h h).
Currency substitution is a phenomenon that domestic residents use a foreign currency as a medium ... more Currency substitution is a phenomenon that domestic residents use a foreign currency as a medium of exchange. It is a common feature of many developing and transition countries. Many literatures concern the role of currency substitution on the effects of monetary policy and on the real exchange rate fluctuations. In this paper, we analyze the extent to which the degree of currency substitution influences on the effects of monetary policy. Especially, we will focus on the role of real exchange rate in the transmission of monetary policy. To attain this objective, we develop a small open economy general equilibrium model which has a standard New Keynesian framework. Our model also assumes incomplete financial markets in which risk sharing conditions and uncovered interest rate parity condition do not hold and net foreign assets play a role. We derive a tractable model in terms of the output gap, domestic inflation rate and the real exchange rate gap. Our impulse responses and uncondit...
In the present paper, we estimate the relative money demand function as a proxy of the degree of ... more In the present paper, we estimate the relative money demand function as a proxy of the degree of currency substitution in seven sample countries by using panel time series methods, namely the fully modified and dynamic OLS approaches. Our sample period of 2002Q1 to 2011Q4 covers the period during which the economies in the sample countries were stable and the U.S. dollar and euro were depreciating in the wake of the global financial crisis. The presented empirical analyses show that there exists a long -run relationship between relative money demand and the nominal interest rate differential. We also find that the nominal interest rate differential has a positive significant effect on the degree of currency substitution. Specifically, the degree of currency substitution decreases when the relative opportunity cost of holding the foreign currency increases, which is consistent with the existence of de-dollarization or de-euroization.
This paper investigates empirically whether a bank lending channel of monetary policy existed in ... more This paper investigates empirically whether a bank lending channel of monetary policy existed in Japan from 2000 to 2012. We extend Bernanke and Blinderi¯s model and estimate it with the Bayesian method to deal with the identification problem. In particular, we focus on the differential effects of quantitative easing monetary policy regardless of bank size (City banks vs. Regional banks) and firm size (all enterprises vs. small and medium-sized enterprises). We find that the semi-elasticities of loan supply with respect to bank lending rate are larger than those of loan demand, implying a need for larger decline in bank lending rate to stimulate loan demand following an increase in loan supply. We also find that the semi-elasticities of both loan demand and loan supply are almost the same with respect to bank lending rate regardless of bank and enterprise size. Bayesian impulse response function analyses show an increase in bank lending but a decline in spread following quantitative...
This paper investigates empirically whether the bank lending channel of monetary policy existed i... more This paper investigates empirically whether the bank lending channel of monetary policy existed in Japan from 2000 to 2012. We employ the sign restrictions VAR approach to deal with the identification problem. In particular, we focus on the differential effects of a quantitative easing monetary policy regardless of bank (City banks vs. Regional banks) and firm (all enterprises vs. small and medium-sized enterprises－SMEs) size. Our impulse response function analyses show that following a quantitative easing monetary policy shock, the lending of Regional banks increases more than that of City banks, and the bank lending rate of Regional banks declines in a larger magnitude. Moreover, the responses of output to reserve supply are larger in Regional banks than that in City banks. Our variance decomposition analyses show that a larger proportion of the forecast error variance in the bank lending of Regional banks relative to City banks, and a larger proportion of the forecast error varia...
Asian Economic and Financial Review
The development and the integration of the bond market is becoming an important policy issue in A... more The development and the integration of the bond market is becoming an important policy issue in ASEAN countries. We investigate government bond market integration in four ASEAN countries. We first decompose yields in ASEAN countries and the United States into global and regional factors using the approximate dynamic factor model. Next, we employ the dynamic conditional correlation method to find that regional markets have been integrated in the sense that their yields are highly and positively correlated with the common regional factor. We also find that the correlation between the global factor and the yield has different signs in different countries. Therefore, we use the pooled mean estimation method to investigate the determinants that make the correlation positive in some countries and negative in others. We find that public interest payments is an important determinant and discover a threshold that depends on public interest payments. The global factor has a significantly negative effect on the yield spread when public interest payments are above the threshold value. From above results, we can conclude that market discipline has been operating in the four ASEAN government bond markets in the sense that investors discriminate between the creditworthiness of the governments' bonds by focusing on the public interest payments. Contribution/ Originality: This study is one of very few studies which have investigated the government bond market integration by considering the correlation between the yield in each country and the regional or the global factor. We also investigate the determinants of the correlation between the yield and the global factor.
Applied Economics and Finance, Jan 10, 2017
This paper investigates empirically whether the bank lending channel of monetary policy existed i... more This paper investigates empirically whether the bank lending channel of monetary policy existed in Japan from 2000 to 2012. We employ the sign restrictions VAR approach to deal with the identification problem. In particular, we focus on the differential effects of a quantitative easing monetary policy regardless of bank (City banks vs. Regional banks) and firm (all enterprises vs. small and medium-sized enterprises-SMEs) size. Our impulse response function analyses show that following a quantitative easing monetary policy shock, the lending of Regional banks increases more than that of City banks, and the bank lending rate of Regional banks declines in a larger magnitude. Moreover, the responses of output to reserve supply are larger in Regional banks than that in City banks. Our variance decomposition analyses show that a larger proportion of the forecast error variance in the bank lending of Regional banks relative to City banks, and a larger proportion of the forecast error variance in the bank lending to SMEs relative to all firms can be explained by monetary policy shock. Similarly, the loans of Regional banks have a larger impact on output than the loans of City banks, and the loans to SMEs have a larger impact on output than the loans to all firms. Moreover, output is more affected by the reserve supply to Regional banks than to City banks. These results together indicate that a quantitative easing policy has a greater impact on the real economy through the lending of Regional banks.
Applied Economics and Finance, Nov 12, 2015
This paper investigates empirically whether a bank lending channel of monetary policy existed in ... more This paper investigates empirically whether a bank lending channel of monetary policy existed in Japan from 2000 to 2012. We extend Bernanke and Blinder's model and estimate it with the Bayesian method to deal with the identification problem. In particular, we focus on the differential effects of quantitative easing monetary policy regardless of bank size (City banks vs. Regional banks) and firm size (all enterprises vs. small and medium-sized enterprises). We find that the semi-elasticities of loan supply with respect to bank lending rate are larger than those of loan demand, implying a need for larger decline in bank lending rate to stimulate loan demand following an increase in loan supply. We also find that the semi-elasticities of both loan demand and loan supply are almost the same with respect to bank lending rate regardless of bank and enterprise size. Bayesian impulse response function analyses show an increase in bank lending but a decline in spread following quantitative easing monetary policy shock, which is evidence of the bank lending channel. Variance decomposition analyses show that while a large proportion of forecast error variance in bank loans is explained by monetary policy shock, a large proportion of forecast error variance in spread is explained by loan supply shocks. These results also comprise evidence of bank lending channel. However, we find no evidence that loans of smaller banks and loans to smaller firms are more sensitive to monetary policy.
Applied Economics and Finance
This paper investigates empirically whether a bank lending channel of monetary policy existed in ... more This paper investigates empirically whether a bank lending channel of monetary policy existed in Japan from 2000 to 2012. We extend Bernanke and Blinder's model and estimate it with the Bayesian method to deal with the identification problem. In particular, we focus on the differential effects of quantitative easing monetary policy regardless of bank size (City banks vs. Regional banks) and firm size (all enterprises vs. small and medium-sized enterprises). We find that the semi-elasticities of loan supply with respect to bank lending rate are larger than those of loan demand, implying a need for larger decline in bank lending rate to stimulate loan demand following an increase in loan supply. We also find that the semi-elasticities of both loan demand and loan supply are almost the same with respect to bank lending rate regardless of bank and enterprise size. Bayesian impulse response function analyses show an increase in bank lending but a decline in spread following quantitative easing monetary policy shock, which is evidence of the bank lending channel. Variance decomposition analyses show that while a large proportion of forecast error variance in bank loans is explained by monetary policy shock, a large proportion of forecast error variance in spread is explained by loan supply shocks. These results also comprise evidence of bank lending channel. However, we find no evidence that loans of smaller banks and loans to smaller firms are more sensitive to monetary policy.
Applied Economics and Finance
This paper investigates empirically whether the bank lending channel of monetary policy existed i... more This paper investigates empirically whether the bank lending channel of monetary policy existed in Japan from 2000 to 2012. We employ the sign restrictions VAR approach to deal with the identification problem. In particular, we focus on the differential effects of a quantitative easing monetary policy regardless of bank (City banks vs. Regional banks) and firm (all enterprises vs. small and medium-sized enterprises－SMEs) size. Our impulse response function analyses show that following a quantitative easing monetary policy shock, the lending of Regional banks increases more than that of City banks, and the bank lending rate of Regional banks declines in a larger magnitude. Moreover, the responses of output to reserve supply are larger in Regional banks than that in City banks. Our variance decomposition analyses show that a larger proportion of the forecast error variance in the bank lending of Regional banks relative to City banks, and a larger proportion of the forecast error varia...
International Journal of Economics and Finance, 2017
In this study, we empirically investigate how currency substitution transmits foreign monetary po... more In this study, we empirically investigate how currency substitution transmits foreign monetary policy shocks to domestic countries and evaluate how the central bank respond to real exchange rate movements in three inflation-targeting Latin American countries under currency substitution, namely Chile, Mexico and Peru, between 2000 and 2011. Our model is based on a small open economy dynamic stochastic general equilibrium model that incorporates currency substitution and incomplete financial markets, and we estimate it by using Bayesian estimation techniques. Our empirical results are as follows. First, the degree of currency substitution is higher in Mexico, while it is negligible in Chile and Peru, which reflects the slight differences in the parameter values capturing the preference for the domestic currency among these countries. Second, the estimated coefficients of the real exchange rate gap in the monetary policy rule are high, meaning that the central banks in these countries ...
International Journal of Economics and Financial Issues, Aug 21, 2014
This study investigates the impacts of the degree of currency substitution on nominal exchange ra... more This study investigates the impacts of the degree of currency substitution on nominal exchange rate volatility in seven countries (Indonesia, the Philippines, the Czech Republic, Hungary, Poland, Argentina, and Peru). We use the Threshold ARCH model to consider the ratchet effect of currency substitution and sample periods in the 2000s, during which time the economies of the sample countries stabilized, while the U.S. dollar and euro depreciated against other major currencies following the recent global financial crisis. The presented empirical analyses show that the degree of currency substitution has significant positive effects on the conditional variance of the depreciation rate of the nominal exchange rate in most sample countries. Moreover, a shock to the depreciation rate of the nominal exchange rate has asymmetric effects on the conditional variance, depending on the sign. One possible explanation for these differential effects is the existence of the ratchet effect of currency substitution.
The purpose of this paper is to investigate (i) at first, whether there exists persistent inflati... more The purpose of this paper is to investigate (i) at first, whether there exists persistent inflation differentials among euro area countries, namely, whether inflation rates among euro area courtiers have converged or not, (ii) next, if there exist persistent inflation differentials among euro area countries, we will investigate the causes of the inflation differentials, especially, we focus on the inflation persistence components (backward-looking price setting behavior) or cyclical components (output gap), (iii) at last, if the causes of inflation are different among countries, whether these differences lead to different effects of monetary policy has. We find that (i) overall euro area inflation rates are in a process of convergence, but crosscountry dispersion in inflation rates across countries has not been eliminated, (ii) the differences in the inflation persistence and the sensitivity of inflation to cyclical components would contribute to the inflation differentials among euro area countries, (iii) there exist the differences in monetary policy effects among these countries, which are consistent with the differences of inflation persistence and sensitivity of inflation to cyclical components across countries.
The purpose of this paper is to investigate (i) at first, whether there exists persistent inflati... more The purpose of this paper is to investigate (i) at first, whether there exists persistent inflation differentials among euro area countries, namely, whether inflation rates among euro area courtiers have converged or not, (ii) next, if there exist persistent inflation differentials among euro area countries, we will investigate the causes of the inflation differentials, especially, we focus on the inflation persistence components (backward-looking price setting behavior) or cyclical components (output gap), (iii) at last, if the causes of inflation are different among countries, whether these differences lead to different effects of monetary policy has. We find that (i) overall euro area inflation rates are in a process of convergence, but cross-country dispersion in inflation rates across countries has not been eliminated, (ii) the differences in the inflation persistence and the sensitivity of inflation to cyclical components would contribute to the inflation differentials among e...
The purpose of this paper is to investigate (i) at first, whether there exists persistent inflati... more The purpose of this paper is to investigate (i) at first, whether there exists persistent inflation differentials among euro area countries, namely, whether inflation rates among euro area courtiers have converged or not, (ii) next, if there exist persistent inflation differentials among euro area countries, we will investigate the causes of the inflation differentials, especially, we focus on the inflation persistence components (backward-looking price setting behavior) or cyclical components (output gap), (iii) at last, if the causes of inflation are different among countries, whether these differences lead to different effects of monetary policy has. We find that (i) overall euro area inflation rates are in a process of convergence, but cross-country dispersion in inflation rates across countries has not been eliminated, (ii) the differences in the inflation persistence and the sensitivity of inflation to cyclical components would contribute to the inflation differentials among e...
Information Processing Letters, 2012
We study the problem of embedding an unweighted complete binary tree into a line with low distort... more We study the problem of embedding an unweighted complete binary tree into a line with low distortion. Very recently, Mathieu and Papamanthou (2008) [9] showed that the inorder traversal of the complete binary tree of height h gives a line embedding of distortion O (2 h), and conjectured that the current lower bound of Ω(2 h h) increases to Ω(2 h), i.e., the upper bound of O (2 h) is best possible. In this paper, we disprove their conjecture by providing a line embedding of the complete binary tree of height h with optimal distortion Θ(2 h h).