Research Programs: Industry Frontiers

Large-scale Simulation and Analysis of Economic Network for Macro Prudential Policy

Project Leader/Sub-Leader

AOYAMA Hideaki

AOYAMA Hideaki (Faculty Fellow)

Leader

Overview

This project aims to define and establish macro prudential policy though model construction and simulation on big economic data, especially the Credit Risk Database (CRD) financial data of small-to-medium enterprises and trade network data owned by RIETI.

Macroeconomic phenomenon are caused by interaction between multitudes of heterogeneous economic agents, which yields co-movements. Among them are business cycles and chain bankruptcy. Thus, establishment of macro prudential policy required for detection and dealing with economic crisis requires detection of these co-movements and modeling of their dynamics. On the other hand, a number of economic agents such as the firms included in the big economics data, with which Japan is fortunate to possess unlike any other country, exceed a million per year. This leads to unique results which no other country can produce. With this in mind, our project will co-operate with K computer of RIKEN AICS in order to utilize huge computational resources and carry out large calculations unheard of so far.

Through these, this research project will produce an evidence-based quantitative definition of macro prudential policy, through which we will establish monitoring of macro-economic situations, evaluation of policies based on it, and simulation of the economy under various external shocks, thereby yielding policy proposals.

June 30, 2016 - May 31, 2018