Household Portfolios in a Secular Stagnation World: Evidence from Japan

Kosuke Aoki, Alexander Michaelides and Kalin Nikolov
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Kosuke Aoki: University of Tokyo

No 16-E-4, Bank of Japan Working Paper Series from Bank of Japan

Abstract: We document low stock market participation rates and high proportions of money in Japanese household portfolios. To replicate these facts, we introduce a money demand motive in a life-cycle portfolio choice model and calibrate the model's structural parameters to match Japanese household financial data. Using counterfactual analysis we find that low expected stock returns, low expected inflation and high fixed costs of stock market participation are the main determinants of Japanese household portfolios.

Keywords: Life Cycle Models; Portfolio Choice; Inflation; Money Demand; Stock Market Participation; Uninsurable Labor Income Risk; Japanese portfolios (search for similar items in EconPapers)
JEL-codes: E41 G11 (search for similar items in EconPapers)
Date: 2016-03-28
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (6)

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