Professor Aoki has contributed significantly to the areas of macro and monetary economics. Aoki (2011) poses two key questions. How does the inflation-output tradeoff depend on shocks to relative prices (such as oil price shock)? How should the monetary authority target the inflation rate in the presence of a relative price shock? To address these questions, he develops a two-sector general equilibrium model of the monetary economy, in which one sector is a competitive sector with flexible prices and the other is a monopolistically competitive sector with sticky prices. He suggests that the monetary authority should target the inflation rate of the sticky price sector if the distortion comes from the price dispersion due to price stickiness. Professor Aoki presents the first coherent theory to explain why the central bank should target the core domestic inflation rate, which excludes flexible price sectors such as energy and fresh foods. Given that many central banks now target the core inflation rate instead of the inflation rate of the general consumer price index, the significance of Professor Aoki's contribution is apparent.
Professor Aoki has also been studying the interaction between credit constraints and aggregate economic activities. Aoki et al. (2004) first document the close correlation between housing prices, housing equity, and home equity withdrawal and consumption (particularly durable consumption). Then, to examine the effects of monetary policy shocks, they develop a model in which households use their houses as collateral for loans. This study shows the usefulness of the financial accelerator approach in understanding both the housing economy and the aggregate economy, and affects the recent analyses on the global financial crisis.
In addition, Professor Aoki has investigated the interaction between international capital flows, asset prices and aggregate production. By developing a small open economy model with financial constraints, Aoki et al. (2009) explain why countries with relatively underdeveloped financial systems tend to experience large swings in asset prices and aggregate output after liberalizing international transactions of financial assets. Today, many researchers are examining the questions of financial and fiscal crises in line with this study.— 「受賞理由」 日本経済学会・2014年度中原賞受賞者
- Aoki, Kosuke (2001), “Optimal monetary policy responses to relative-price changes”, Journal of monetary economics 48 (1): 55-80
- Aoki, Kosuke (2003), “On the optimal monetary policy response to noisy indicators”, Journal of monetary economics 50 (3): 501-523
- Aoki, Kosuke; Proudman, James; Vlieghe (2004), “House prices, consumption, and monetary policy: a financial accelerator approach”, Journal of financial intermediation 13 (4): 414-435