Research Theme
[Purposes of forming the research base]
The 21st Century COE program “Development of a Theory of Market Quality and Empirical Analysis Using Panel Data” (“21COE” below), centered around the project leader Professor Naoyuki Yoshino, proposed and verified the new theory that “high-quality markets are essential for the sound development and growth of the modern economy” (market quality theory). This theory holds that many contemporary economic problems – such as the U.S. subprime mortgage crisis and the fraudulent corporate accounting discovered following the collapse of the U.S. Internet bubble – can be viewed as resulting from a low level of market quality. Based on this perspective, the 21COE constructed household behavior panel data, conducted both theoretical and empirical research, and established market quality theory. The 21COE had a strong educational effect with the publication of many papers by researchers, and received a high interim acclaim. The 21COE also built up cooperative relations with many overseas universities and organizations, and formed a wide international network.
Under the direction of Project Leader Professor Yoshino, the current Global COE, “Raising Market Quality – Integrated Design of Market Infrastructure” goes beyond the activities of the 21COE to establish the new perspective in economics of grasping markets themselves endogenously, and to clarify the dynamism of market quality improvement in the real economy. To those ends, we consider the entirety of the laws, systems, organizations, culture, ethics, practices and other diverse factors surrounding markets as market infrastructure, and work to elucidate the dynamic relations between market quality and market infrastructure.
Much of the prior research on markets and market systems is based on direct comparison (static analysis) between the ideal conditions of perfect competition and actual markets. In reality, however, few markets can be converted to perfect competition in a very short time. This Global COE postulates a spectrum for the range of various markets with differing market quality, having perfect competition at one end, and considers actual markets as endogenously moving gradually up this spectrum along with the changes in their market infrastructure.
In terms of economic theory, the purpose of this Global COE is to elucidate this process from the overall perspective of theory, data and verification, and to clarify the course whereby economies achieve sound development and growth by promoting the gradual improvement of market quality through the integrated design (coordination) of market infrastructure. This demands high-quality data which appropriately grasp endogenous market changes. This Global COE has constructed new corporate panel data which provide dynamic information, and linked these with the household panel data compiled under the 21COE. We are clarifying the process of raising market quality from both the supply and the demand sides, in line with the actual conditions of individual markets.
The findings from the panel data is supplemented with wide-ranging research in such disciplines as finance and government finances, labor economics, law and economics, corporate systems, international economics, and history, and is used to demonstrate the effectiveness of this new policy idea of raising market quality through the prior and indirect method of market infrastructure coordination. This Global COE is also actively engaged in policy design and proposals based on actual conditions, and works to establish the policy concept of raising market quality in society.
At the same time, this Global COE is also fostering many young researchers who can further develop the research of this program in the future and take leadership in the improvement of market quality. We are expanding the international network of the 21COE, and creating a comprehensive international education and research institution for theory, verification, data compilation, as well as policy design and proposal from the perspective of market quality. Through these activities, we aim at contributing to the development of economies with high quality markets.
[Outline of the Insitituion Formation Plan]
Given these purposes, this Global COE systematizes our graduate education and completely changes the former apprentice-like education system.
This Global COE introduces an open education and research system. We present the educational goals and required abilities which students must gain in stages, and conduct education and research while carefully checking the educational effect. In cooperation with the Kyoto University staff, this Global COE presents lectures and seminars concerning the program theme, sets up intensive lecture series, and otherwise presents wide-ranging lectures, inviting leading Japanese and foreign researchers as guest speakers.
At the same time, this Global COE has also established a system for overseas study and training, with systematic opportunities for students to accumulate experience living abroad. We are conducting reforms to introduce a financial assistance system for students in coordination with the Keio University administration, and striving to conduct attractive graduate education. Making the greatest possible use of our international network, this Global COE discovers promising researchers and exchange students, and generates young researchers and Ph.Ds engaged in the study of market quality in an international environment.
This Global COE conducts education and research through close coordination of our four departments, as follows, under the direction of our project leader Professor Yoshino, who is an internationally influential advocate of a new economic policy integrating market quality theory and practice.
Theory Development Department: Establishes the economic policy idea of improving market quality through market infrastructure coordination centered around Professor Makoto Yano, who is an advocate of market quality theory.
Panel Data Design Analysis Department: Designs and compiles new corporate data, links these with household data from the 21COE, conducts empirical analyses toward elucidating the process of raising market quality, and prepares the basis for policy proposals centered around Professor Yoshio Higuchi, who is a leading figure in Japanese panel data design and analysis.
Applied and Empirical Analysis Department: Supplements knowledge gained from panel data empirical analyses with wide-ranging research in such fields as individual markets, corporate systems, law and economics, international economics and history centered around Professor Yoshino.
Policy Design and Proposal Department: Works at establishing the Global COE policy concept of raising market quality, and contributing to the revival of the Japanese economy and the growth of the world economy centered around Professor Yoshino.
[Collaboration with the Kyoto Institute of Economic Research]
The 21COE collaborated with the Kyoto University 21st Century COE program “Formation of Interfaces for Advanced Economics Analysis” and attained major results in both education and research via joint research, joint seminars using TV conferencing systems, joint publication of the International Journal of Economic Theory, and joint sponsorship of international academic conferences. 21COE Project Leader Yoshino and Kyoto University Professor Kazuo Nishimura launched the Japan Economics Education Association, which instituted the Economics Record Examination from 2002 and has made major contributions to economics education.
The Global COE’s networks are based on this strong cooperative relationship with Kyoto University. In place of the prior dualistic viewpoint of market successes and failures, market quality research comprehensively and synthetically grasps wide-ranging market phenomena toward resolving economic problems by establishing and improving markets.
To expand the 21COE research – which emphasized labor markets and capital markets – to include quasi-public goods markets such as education, this Global COE seeks multi-faceted collaboration in education and research with Kyoto Institute of Economic Research staff. The KIER staff, centered around Professor Nishimura and Professor Masahisa Fujita, have achieved major research findings in the fields of market limits and market establishment, which are deeply related to market quality research. This Global COE aims at constructing a more comprehensive education and research institution through cooperation with such researchers.