Toshitaka Sekine ワーキングペーパー一覧に戻る

  • Going Cashless: Evidence from Japan’s Point Reward Program

    Abstract

    In October 2019, the Japanese government started a unique program that offered points (discounts) for cashless payments. Using credit card transaction data, we compare credit card usage at restaurants that participated in this program and those that did not. Our main findings are as follows. First, the number of card users was 9- 12 percent higher in participating than in non-participating restaurants. Second, the positive impact of the program on the number of card users persisted even after the program ended in June 2020, indicating that the program had a lasting effect to promote cashless payments. Third, the impact of the program was significantly larger at restaurants that started accepting credit cards more recently, since the share of cash users at those restaurants was larger just before the program started. Finally, two-thirds of the difference between participating and non-participating restaurants disappeared during the first surge of COVID-19 in April 2020, suggesting that customers switched from cash to cashless payments to reduce the risk of infection both at participating and non-participating restaurants, but the extent to which customers switched was larger at non-participating restaurants with a larger share of cash users just before the pandemic.

     

    Introduction

    The share of payments using cashless methods is much lower in Japan than many other countries. BIS statistics, for example, show that total payments via cashless means such as credit cards, debit cards, and e-money in Japan amounted to 74 trillion yen or 24 percent of household final consumption expenditure in 2018. This percentage is considerably lower than the 40 percent or more in other developed countries such as the United States, the United Kingdom, and Singapore. The social cost of relying on cash payments is substantial. For instance, using data for several European countries, Schmiedel et al. (2012) show that the unit cost of cash payments is higher than that of debit card payments. In addition, Rogoff (2015) argues that cash makes transactions anonymous, which potentially facilitates underground or illegal activities and leads to law-enforcement costs.

    WP036

  • Chronic Deflation in Japan

    Abstract

    Japan has suffered from long-lasting but mild deflation since the latter half of the 1990s. Estimates of a standard Phillips curve indicate that a decline in inflation expectations, the negative output gap, and other factors such as a decline in import prices and a higher exchange rate, all account for some of this development. These factors, in turn, reflect various underlying structural features of the economy. This paper examines a long list of these structural features that may explain Japan's chronic deflation, including the zero-lower bound on the nominal interest rate, public attitudes toward the price level, central bank communication, weaker growth expectations coupled with declining potential growth or the lower natural rate of interest, risk averse banking behavior, deregulation, and the rise of emerging economies.

    Introduction

    Why have price developments in Japan been so weak for such a long time? What can leading-edge economic theory and research tell us about the possible causes behind these developments? Despite the obvious policy importance of these questions, there has been no consensus among practitioners nor in academia. This paper is an attempt to shed some light on these issues by relying on recent works on the subject in the literature.

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