TIA CoE Research Seminar: Deflationary Equilibrium with Uncertainty

We’re honored to host Professor Taisuke Nakata for a session on Deflationary Equilibrium with Uncertainty. Professor Nakata is an Associate Professor at the University of Tokyo’s Graduate School of Economics and Graduate School of Public Policy. His research primarily focuses on macroeconomics, with particular expertise in fiscal and monetary policy and public health. His work, published in leading economic journals, has earned him prestigious awards, including the Ishikawa Prize and the KDDI Foundation Award.

Abstract:

We analyze the so-called deflationary equilibrium of the New Keynesian model with an interest rate lower bound when the future course of the economy is uncertain. In this equilibrium, we find that the rate of inflation is higher at the risky steady state—which accounts for uncertainty—than at the deterministic steady state, which abstracts from uncertainty. The rate of inflation at the risky steady state can be positive if the central bank's target rate is positive. Our theory aligns with Japan’s experience in the 2010s, where inflation remained positive on average despite the binding interest rate lower bound.

Event Details:

📅 Date: 14 May 2025

⏰ Time: 12:30 PM - 1:30 PM

📍 Venue: Level 2, CR-W2-04, Asia School of Business

✨ FREE session – walk-ins welcome! Register now.

About the Tun Ismail Ali Center of Excellence (TIA CoE):

TIA CoE is a newly endowed research center by Bank Negara Malaysia focused on central banking themes, connecting academics through research programs and seminars in monetary and financial economics. TIA CoE is now accepting applications for research grants for academic researchers.

🔗 Read more: https://asb.edu.my/research-office/tun-ismail-ali-coe/

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