NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Takaaki Nomoto

Cabinet Secretariat
Government of Japan
1-6-1, Nagatacho, Chiyoda-ku
Tokyo, Japan

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NBER Working Papers and Publications

November 2015Explaining Foreign Holdings of Asia's Debt Securities: The Feldstein-Horioka Paradox Revisited
with Charles Yuji Horioka, Akiko Terada-Hagiwara: w21734
In this paper, we find that home bias is still present in all economies and regions, especially in the case of short-term debt securities, but that there are substantial variations among economies and regions in the strength of home bias, with the Eurozone economies, the US, and developing Asia showing relatively weak home bias and advanced Asia, especially Japan, showing relatively strong home bias. We then examine trends over time in foreign holdings of debt securities and find that capital has been flowing from the US and the Eurozone economies to both advanced Asia (especially Japan) and developing Asia and that foreign holdings of debt securities have been increasing in advanced as well as developing Asia but for different reasons. The main reason in the case of advanced Asia (especia...

Published: Charles Yuji Horioka & Akiko Terada-Hagiwara & Takaaki Nomoto, 2016. "Explaining Foreign Holdings of Asia's Debt Securities: The Feldstein-Horioka Paradox Revisited," Asian Economic Journal, vol 30(1), pages 3-24.

October 2013Why Has Japan's Massive Government Debt Not Wreaked Havoc (Yet)?
with Charles Y. Horioka, Akiko Terada-Hagiwara: w19596
In this paper, we present data on trends over time in government debt financing in Japan since 2010 with emphasis on the importance of foreign holders and speculate about the determinants of those trends. We find that Japanese government securities were held primarily by domestic holders until recently because robust domestic saving (combined with strong home bias) made it possible for domestic investors to absorb most of the government debt but that foreign holdings of Japanese government securities have increased sharply in recent years, especially in the case of short-term government securities. We show that trends in foreign holdings of Japanese government securities can be explained by conventional economic factors such returns and risks and that the recent surge in foreign holdings...
 
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