Institute of Economic Research, Kyoto University
For Advanced Economic Analysis
Global Center of Excellence Program “Raising Market Quality and Integrated Design of Market Infrastructure| (jointly with Keio University)
The 21st Century Center of Excellence Program “Development of a Theory of Market Quality and Empirical Analysis Using Panel Data.” proposed the new research area of market quality theory, based on the idea that high-quality markets are required for healthy development and growth in the contemporary economy. The theory holds that low market quality is a cause of many contemporary problems such as the US subprime housing loan crisis and the fraudulent corporate accounting that surfaced in the US after the dot-com collapse. The field was defined by conducting theoretical and empirical research on household behavior panel data, and disseminated through the publication of many papers, leading to positive interim appraisals. The program also built up cooperative relations with a worldwide network of universities and institutes.
This Global COE program clarifies the dynamics of market quality in the actual economy, by setting out a new economic perspective that views the market as an endogenous unit. The many elements surrounding the market including laws, institutions, organizations, culture, ethics and customs are taken as the market infrastructure, and the dynamics of market quality and market infrastructure are identified. Conventional theories of markets and market structure have tended to be based on static analysis, a direct comparison between the actual market and the ideal conditions of perfect competition. Yet in reality few markets could be converted overnight to perfect competition. This program posits a spectrum of markets with differing qualities, with perfect competition at one end, along which the actual market gradually and endogenously moves according to changes in its infrastructure. The process is elucidated through theory, data and verification, using wide-ranging research on findings from panel data. This serves the field of economics by enabling the design and coordination of market infrastructure for gradual stimulation of market quality, thus determining paths for healthy development and growth. In the area of policy design, the program seeks to validate the effectiveness of a new principle: pursuing market quality through the prior, indirect method of market infrastructure coordination.
At the same time, this Global COE fosters many young researchers who can develop the research in the future and take leadership in the improvement of market quality.
Webpage of the Global COE Program on Human Behavior and Socioeconomic Dynamics (Kyoto University/Osaka University)
Overview of Programs
Building an economics based on human behavior depends on clarifying the mechanisms of human behavior from an economic standpoint. Specifically, it is important to measure preference parameters including time preference, risk aversion, altruism, impulsivity and liquidity preference. In this program the parameter measurement is performed by integrating traditional economics methods with methods of statistical analysis, hypothetical questions, economic experiments and neuroscience.
The attributes of human preference derived through those methods provide the basis for clarifying socioeconomic dynamics that conventional analysis does not grasp. The specific research areas are:
① Preference and Wellbeing: Clarifying the preference characteristics such as time preferences, risk aversion or altruism and the relationship between feeling of wellbeing and economic circumstances
② Household Behavior: Analysis of domestic consumption and labor supply behavior, considering psychological aspects.
③ Business Behavior: Analysis of investment behavior, funding behavior and investor behavior.
④ Institutional Design: Efficient design of market systems and economic organizations.
⑤ Macroeconomics: Growth and business fluctuations.
⑥ Education and Training: Analysis of the economic effects of education and training.
These areas are interrelated. What economics researchers are seeking is the ability, when confronted by a new economic problem, to develop new concepts and methods, propose solutions, and share findings with the global research community. To foster young researchers with those capacities, the program has put in place a thorough curriculum of basic common courses including a mathematics preparatory course for incoming graduate students. Doctoral students participate in COE project seminars to learn about panel research, economic experiments and other new research techniques. This type of educational structure fosters interdisciplinary researchers who are not confined to particular subject fields. Graduate students are also sent to international conferences and overseas trainings, and taught to prepare papers and presentations in English. This COE program continues to seek young researchers to take on a leading edge of economics.