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Takatoshi Ito contributes to the Center’s research activities and has several individual ongoing research projects. Professor Ito’s research and teaching focus on international finance, foreign exchange market micro- structure, Asian financial markets, inflation targeting, and the Japanese economy. In addition to his role as CJEB’s associate director of research, Professor Ito is a professor at the School of International and Public Affairs (SIPA) at Columbia University. He also maintains a teaching and research position during the summer at the National Graduate Institute for Policy Studies in Tokyo.
Professor Ito’s research focuses on three broad themes: international finance, the Japanese economy, and the Asian financial markets. He has carried out a series of research projects on the dynamics of the exchange rates in various time spans and frequencies. He has done macroeconomic analysis of the yen/dollar exchange rates after the rate floated in 1973. Currently, he is examining the microstructure of the foreign exchange markets using a tick-by-tick data- set, which contains all firm quotes and deals in a computerized order-matching engine. He is researching how particular institutions and rules in the market influence pricing and deal activities.
His work on the Japanese economy includes both macro and microeconomic aspects of the economy. On monetary policy, he was a proponent of inflation targeting in Japan, long before the Bank of Japan finally adopted it in 2013. He is investigating transmission channels and the effects of quantitative easing adopted by the four major central banks. On fiscal policy, he has been analyzing the debt sustainability of Japanese government debts. He has been conducting a simulation analysis of a menu of fiscal consolidation with varying degrees and speeds. On growth strategy, he investigates various reform plans in regulated industries from agriculture and education, to medical and health care. He combines theory and empirical research and derives policy implications.
He belongs to a research group at the Research Institute of Economy, Trade and Industry on Japanese exporters’ decisions to pass through the exchange rate changes on export and destination prices. He is also a special member of the Council on Customs, Tariff, Foreign Exchange, and other Transactions at the Ministry of Finance, Japan. Professor Ito organizes internationally acclaimed seminars, such as the NBER East Asian Seminar on Economics in June 2016.
He served as chair to the study group on reforming public pension funds in Japan. A report from his group, recommending port- folio rebalance away from Japanese government bonds and toward more risk assets, has been very influential in the subsequent change of the Government Public Investment Fund.
Professor Ito’s involvement in Southeast and East Asian economies dates from the time of Asian currency crisis in 1997–1998. He has done research on, as well as given policy advice related to, economic and financial issues in Southeast Asia, in particular Thailand, Indonesia, Korea, and Myanmar. He continues to visit these countries to engage in academic and policy discussions. He has been doing research, as well as teaching, on inflation targeting and exchange rate regime and financial and capital markets development in the Asian emerging market economies.