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Nao Sudo

Ph.D., Boston University, 2009.

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Current Position

Director, Senior Economist, Bank of Japan.

Journal Publications

1. "Analysis of the Transmission of Carbon Taxes using a Multi-Sector DSGE" with Kohei Matsumura and Tomomi Naka, Energy  Economics, forthcoming.

•    We construct a multi-sector DSGE NK sticky price model and study the impact of carbon tax on the output and prices.

2. "Assessing monetary policy surprises in Japan by high frequency identification" with Fumitaka Nakamua and Yu Sugisaki, Journal of the Japanese and International Economies,vol 71, 2024.

•    We extract monetary policy surprises by so-called high-frequency identification, using the data during a low interest rate period in Japan and study if they are closely related to the key financial variables as the standard theory suggests.

3. "Productivity Slowdown in Japan’s Lost Decades: How Much of It Can Be Attributed to Damaged Balance Sheets?" with Ichiro Muto and Shunichi Yoneyama, Oxford Bulletin of Economics and Statistics, vol. 85(1), pages 159-207, 2023.

•    We study if TFP growth slow down in the early 1990s in Japan was related to impairments of balance sheet of banks and firms, using a DSGE model and show that an important portion of TFP growth decline was indeed due to the impairments.

4. "Is macroprudential policy instrument blunt? Empirical analysis based on Japan's experience from the 1970s to the 1990s," with Katsurako Sonoda, Journal of Money, Credit, and Banking, 2023.

•    We estimate the impacts of quantitative restriction (総量規制 soryo kisei in Japanese), using the FAVAR.

•    We  study why the quantitative restriction had affected the aggregate economy even though it was a targeted instrument. 

5. "Quantifying Stock and Flow Effects of Bond Purchases," with Masaki Tanaka, Journal of Money, Credit, and Banking, vol. 53(7), pages 1719-1755, 2021.

•    We compare stock effects and flow effects of government bond purchased by the Bank of Japan using an estimated DSGE model that incorporates preferred habitat investors and show that the former effects have played a far larger role. 

6. "Population Aging and the Real Interest Rate in the Last and Next 50 years: A Tale told by an Overlapping Generations Model," with Yasutaka Takizuka, Macroeconomic Dynamics,  vol. 24(8), pages 2060-2103, 2020.

•    We construct an overlapping generation model calibrated to Japan's economy and quantify the impact of a decline in fertility rate and an increase in longevity on the real interest rate. Both effects reduce labor inputs relative to capital inputs, lowering the rate.

• Comments by Financial Times "Bond yields have support from a world getting older and richer," March 2018.

• www.ft.com/content/8ce72a10-1c05-11e8-956a-43db76e69936 

7. "Deviations from Covered Interest Rate Parity and the Dollar Funding of Global Banks," with Tomoyuki Iida and Takeshi Kimura, International Journal of Central Banking, vol.14(4), 2018.

•    We empirically study the determinants of CIP deviation against USD in four currencies, EUR, JPN, CHF, and GBP. 

•    We construct a simple model, extending that of Ivashina, Scharfstein, and Stein (2015), to explain the differentials in CIP deviation. 

8. "Working Less and Bargain Hunting More: Macro Implications of Sales during Japan's Lost Decades," with Kozo Ueda, Tsutomu Watanabe, and Kota Watanabe, Journal of Money, Credit, and Banking, vol.50, 2018.

•    We empirically show that the frequency of sales and hours worked are negatively correlated in Japan.

•    We theoretically explain the correlation, using a DSGE model with households' endogenous bargain hunting decisions. 

9. "Japan's Financial Crises and Lost Decades," with Ikuo Takei, Kozo Ueda, Naohisa Hirakata, Japan and the World Economy, vol. 40(C), 2016.

•    Using a DSGE model with a financial accelerator model, we quantify a portion of output variations explained by shocks to balance sheet of firms  and  financial intermediation.   

10. "Chained Credit Contracts and Financial Accelerators," with Kozo Ueda and Naohisa Hirakata, Economic Inquiry, vol.55(1), 2017.

•    We extend the financial accelerator model developed by Bernenke, Gertler, and Gilchrist (1999) so that not only firms but also financial intermediaries raise external funds through credit contracts. 

• We show using the model that net worth of financial intermediaries matter greater than that of firms.

11. "Macroeconomic Impact of Population Aging in Japan: A Perspective from an Overlapping Generations Model," with Ichiro Muto and Takemasa Oda, IMF Review, vol.64(3), 2016.

12. "Wage, Income and Consumption Inequality in Japan, 1981-2008: from Boom to Lost Decades," with Jeremy Lise, Michio Suzuki, Ken Yamada and Tomoaki Yamada, Review of Economic Dynamics, vol. 17(4), 2014.

13. "Micro Price Dynamics under Japan's Lost Decades," with Kozo Ueda and Kota Watanabe, Asian Economic Policy Review, vol. 9, 2014.

14. "Global Liquidity Trap," with Ippei Fujiwara, Tomoyuki Nakajima, and Yuki Teranishi, Journal of Monetary Economics, vol. 60(8), pages 936-949, 2013.

15. "Capital Injection, Monetary Policy, and Financial Accelerators," with Kozo Ueda and Naohisa Hirakata, International Journal of Central Banking, vol. 9(2), pages 101-145, 2013.

16. "Inventory-Theoretic Model of Money Demand, Multiple Goods, and Price Dynamics," with Hiro Ishise, Journal of Money, Credit, and Banking, vol. 45, Issue 2-3,  pages 299–326, 2013.

•    We construct a multi-goods segmented market model. The model predicts that prices of durables or luxurious goods decline greater  in response to contractionary monetary policy shocks. We show that these predictions agree with U.S. data. 

17. "Sectoral Co-Movement, Monetary-Policy Shock, and Input-Output Structure," Journal of Money, Credit, and Banking, vol. 44(6), pages 1225-1244, 2012.

•    We construct a DSGE model that incorporates two sectors, non-durable sector and durable sector, and the 2 x 2 input-output matrix and show that the model is able to solve the "co-movement puzzle," raised by Barky, House, and Kimball (2009).

18. "Will a Growth Miracle Reduce Debt in Japan?," with Selahattin Imrohoroglu, Keizai Kenkyu, vol. 62(1), pages 44-56, 2011.

19. "Productivity and Fiscal Policy in Japan: Short-Term Forecasts from the Standard Growth Model," with Selahattin Imrohoroglu, Monetary and Economic Studies, vol. 29, pages 73-106, 2011.

20. "Do banking shocks matter for the U.S. economy?," with Kozo Ueda and Naohisa Hirakata, Journal of Economic Dynamics and Control, vol. 35(12), pages 2042-2063, 2011.

21. "The Effects of Oil Price Changes on the Industry-Level Production and Prices in the United States and Japan," with Ichiro Fukunaga and Naohisa Hirakata, NBER Chapters, in: Commodity Prices and Markets, East Asia Seminar on Economics, Volume 20, pages 195-231 National Bureau of Economic Research, Inc, 2010.

22. "The Zero Lower Bound and Monetary Policy in a Global Economy: A Simple Analytical Investigation," with Ippei Fujiwara and Yuki Teranishi, International Journal of Central Banking, vol. 6(1), pages 103-134, 2010.

23. "A comparison of the Japanese and U.S. business cycles," with Anton Braun, Julen Esteban-Pretel, and Toshihiro Okada, Japan and World Economy, vol. 18(4), pages 441-463, 2006.