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The Quarterly Japanese Economic Model (Q-JEM): 2011 Version

November 18, 2011
Ichiro Fukunaga*1
Naoko Hara*2
Satoko Kojima*3
Yoichi Ueno*4
Shunichi Yoneyama*5

Click on Full Text [PDF 962KB]

Abstract

This paper provides a brief explanation and a detailed documentation of the current version of the Quarterly Japanese Economic Model (Q-JEM), which has been developed and constantly updated since the mid-2000s at Research and Statistics Department, Bank of Japan. Q-JEM is a large-scale hybrid-type macroeconomic model that pursues both long-run theoretical coherence and short-run empirical validity, as is the Federal Reserve Board's FRB/US model. The model captures various aspects of Japan's economy, including inflation dynamics, the zero lower bound on nominal interest rates, linkages with overseas economies, and the effects of population aging and declining potential economic growth.

Keywords
Macroeconomic model; Japan's economy; Inflation; Monetary policy; Error-correction mechanism

JEL classification
E17; E37

This paper is a revised version of "A Hybrid-type Model of Japan's Economy: the Quarterly Japanese Economic Model (Q-JEM)" authored by Hibiki Ichiue, Tomiyuki Kitamura, Satoko Kojima, Toyoichiro Shirota, Koji Nakamura, and Naoko Hara, which was released in July 2009 (in Japanese only) as Bank of Japan Working Paper Series 09-J-6. Takemasa Oda, Masashi Saito and Ikuo Takei have also contributed to the updates of Q-JEM. Saki Inoue and Naoko Ozaki provided excellent assistance with manuscript and data preparation. The authors are grateful to John Roberts (Federal Reserve Board) for his kind support and advice since the early stages of the development of Q-JEM. They would also like to acknowledge helpful comments from Kosuke Aoki, Etsuro Shioji, and the staff at the Bank of Japan. Views expressed in this paper are those of the authors and do not reflect those of the Bank of Japan.

  •   *1 Financial Markets Department (formerly Research and Statistics Department)
    E-mail : ichirou.fukunaga@boj.or.jp
  •   *2 Research and Statistics Department
    E-mail : naoko.hara@boj.or.jp
  •   *3 Research and Statistics Department
    E-mail : satoko.kojima@boj.or.jp
  •   *4 Research and Statistics Department
    E-mail : youichi.ueno@boj.or.jp
  •   *5 Research and Statistics Department
    E-mail : shunichi.yoneyama@boj.or.jp

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