慶應義塾大学 経済学部 PEARL入試 志望理由書 提出例(藤原 一平先生ゼミ向け)
Dr. Ippei Fujiwara
Department of Economics, International Monetary Theories
Dear Professor Fujiwara,
I am writing this letter to explain my motivation in applying for Department of Economics at Keio University, specializing in International Economic Theories and related monetary fields. As we are exposed to more information than ever, the need for us to truly understand and process them only get bigger. I have read a number of your published work which I was very intrigued by. I hope I am able to elaborate on area of studies that I think is very much relevant, and I would be more than grateful if you could kindly give this a consideration.
How has Keynes’s liquidity trap theory held up over time? I think it’s worth revisiting this issue in a world we live with $17 trillion in negative yield bonds. Keynes was a complex thinker, who looked at issues from many different perspectives that were not always internally consistent, his writings were chaotic but largely accurate in the long term. He said that, “after the rate of interest has fallen to a certain level, liquidity-preference may become virtually absolute in the sense that almost everyone prefers cash to holding a debt which yields so low a rate of interest. In this event the monetary authority would have lost effective control over the rate of interest.” To summarize, he predicted a world where interest rate would fall low and central institutions will lose control.
A liquidity trap is a situation in which interest rates are too low and savings rates are too high, making monetary policies ineffective. In a liquidity trap, consumers choose to avoid bonds and keep their funds in savings because of the prevailing belief that interest rates will soon rise than bonds. Then, a country’s central bank try to stimulate the economy by increasing the money supply, there would be no effect on interest rates, as people aren’t convinced to make any changes to saving management. As part of the liquidity trap, consumers continue to hold funds in standard deposit accounts, such as savings and checking accounts, instead of in other investment options, even when the central banking system attempts to stimulate the economy through the injection of additional funds. High consumer savings levels, often spurred by the belief of a negative economic event on the horizon, causes monetary policy to be generally ineffective.
For the first time since the Great Depression, the world seems to be in a global liquidity trap. The unintended consequence of many central banks pushing negative interest including BOJ, rate policy is conjuring deflationary headwinds, stronger currencies, slow deflation and hindered exports and growth which is probably the exact opposite of what struggling economies need. But when monetary policy is the only game in town, negative rates are likely to bring even more negative rates, creating a perverse cycle with important implications for investors.
There are a number of ways to help the economy come out of a liquidity trap, such as increasing government spend, raising interest rate and else. With international economic dependence, understanding monetary policies and economic activities worldwide is extremely important. I assume this can be an addition to a number of researches conducted in your seminar and I would love to take part. Thank you very much for taking the time to read and I look forward to hearing from you soon on this matter.
Thank you and best regards,
*Indeterminacy and Forecastability, (with Yasuo Hirose), 2014, Journal of Money, Credit and Banking 46(1) *Global Liquidity Trap, (with Tomoyuki Nakajima, Nao Sudo and Yuki Teranishi), 2013, Journal of Monetary Economics 60(8)