Can Japan succeed in “Chigyo-ka” (intelprise-formation)?

There are two aspects in today's information revolution that started in the late 1970s. The first is an aspect referred to as “the third industrial revolution,” which triggers the transition to the “21st century system of Industrialization.” The information revolution in this sense brings the creation of new “breakthrough industries (new multimedia industries).” And the second aspect of the information revolution possesses the characteristics of both a technological revolution and a social revolution and brings about the arrival of the third phase of the historical evolutionary process of the modern civilization, which proceeds through three phases, namely “militarization, industrialization, and then informatization.”If the bearers of modern industrialization are a “group of enterprises” that have been engaged in the race in order to gain “wealth” (generalized means of exchange/exploitation power), and if these enterprises' activities have been exercised in the world market where their products have been sold, then it is appropriate to call the bearers of informatization a “group of intelprises.” They will be engaged in the race to gain “wisdom” (generalized means of persuasion/induction power), then stages of their activities can be called a “global intelplace” where “sharables,” that is, information and knowledge, will be disseminated. And now, toward the 21st century, the third phase of modernization, which can be called the “informatization/intelprise formation” or the “wisdom game” (intellectualism), is about to begin.Japan's “ie society (a society based on the ie principle—literally, it means “house” but here it is interpreted as cultural principle for organizing a society), which has been going through the process of evolution on the Japan Archipelago, has developed a network-based organization with little stratification within its infrastructure. In this sense, Japanese society can be characterized as a “network-oriented society” in which intelprises and an intelplace in the broad sense have functioned as the essential components of the society since Middle Ages. In general, an intelplace and intelprises that operate actively within this framework serve as the flexible bases for different types of social relations and institutions, such as states and markets and eventually integrate these into the society to a certain extent. In fact, it took place quite regularly during the modernization “in the narrow sense,” or Westernization of Japanese society after the Meiji Restoration. There exist some problems, however. Some of the characteristics found in Japanese society may become obstacles to activities aimed at the sharing and promotion of information and knowledge in the global intelplace and Japanese participation in the “wisdom game.” Badly needed are serious efforts for Japanese intelprise-formation to reduce these obstacles as much as possible.     

At the crossroads of “futurism” and “prospective”: Towards a Canadian synthesis?

North American “future studies” and the French concept of “prospective” have been integrated to provide the basis for an attempted “Canadian Synthesis” in the approach developed by the Montreal-based think-tank, the Gamma Institute. In this paper the founding president of Gamma outlines the four stages of the approach in a conceptual framework entitled the “Chronospace” and illustrates its applicability by referring to some of Gamma's projects in the last 12 years.     

A model of “coupled” technology transfer : A logistic curve approach

This article presents a mathematical model relating to the technology transfer problem. The origin of the problem stems from the existing trade-offs between the strategies of “technological progressiveness” and “static efficiency” employed by firms or countries defined as “leaders” and “followers,” respectively. The formulation of the model is based on the assumption that the technological development of a firm or a country follows a logistic growth curve when related to a specific technology. During the process of a “coupled” technology transfer, the development of the follower changes and its behavior is described by a first order nonhomogenous deferential equation. Different scenarios of the “coupled” technology transfer between the leader and the follower are being discussed.     

“Constitutionalizing” the corporation

To become effective instruments in the attainment of a sustainable society, corporations should have their constitutional status settled. Thus far, mainly by Supreme Court decisions, corporations have an uncertain status. They are “persons” under the Constitution and have certain rights; but unlike natural persons, they do not have concomitant constitutional duties. Corporations should be viewed as “private” governments exercising substantial power in society. They are, however, considered to be associations of individuals rather than divisions of society. The need is to legitimate their governing power by “constitutionalizing” them. That can be done by corporations accepting, or having imposed upon them, two principal constitutional duties. First, means should be developed whereby corporate officers routinely take the general good into account. That duty could be implemented by making “social impact statements,” analogous to but broader than the familiar environmental impact statements, before making important corporate decisions. Secondly, as “sociological communities,” corporate officers wield considerable power over members of those communities. A bill of rights similar to the Constitution's Bill of Rights is recommended so as to make corporate power that is necessary for achievement of societal goals as tolerable and decent as possible. Acceptance of those duties would make corporations parts of, not separate from, the greater corporation called society. They would be private, profit-making entities with a definite public function. Preferably, the duties should be voluntarily accepted. Congress, however, has undoubted constitutional power to impose both, should it so desire.     

Tax revenues, fiscal corruption and “shame” costs

In this paper we explore tax revenues in a regime of widespread fiscal corruption in a static framework. We prove that the relationship between the tax rate and tax revenues depends on the relevance of the “shame effect” of being detected in a corrupt transaction. In countries with a “low shame” effect, tax revenues grow as the tax rate increases. Moreover, there is a critical tax rate where the growth rate of tax revenues begins to reduce. In countries with a high “shame effect” tax revenues increase up to a threshold value and then decrease.     

“Very Nice” trivial equilibria in strategic market games

Following Shapley [Theory of Measurement of Economic Externalities, Academic Press, New York, 1976], we study the problem of the existence of a Nash Equilibrium (NE) in which each trading post is either active or “legitimately” inactive, and we call it a Shapley NE. We consider an example of an exchange economy, borrowed from Cordella and Gabszewicz [Games Econ. Behav. 22 (1998) 162–169], which satisfies the assumptions of Dubey and Shubik [J. Econ. Theory 17 (1978) 1–20], and we show that the trivial equilibrium, the unique NE of the associated strategic market game, is not “very nice,” in the sense that it is not “legitimately” trivial. This result has the more general implication that, under the Dubey and Shubik's assumptions, a Shapley NE may fail to exist.     

State of the “life span revolution” between 1980 and 2000

Using data for 163 countries, state of the “life span revolution” over the period 1980–2000 is studied in terms of measures of cross-country inequality and through least-squares and quantile-regression estimation of simple convergence models. Four main points are noted. First, dynamics of the cross-country distribution of life expectancy during these 20 years seem markedly different from those for the preceding decades: instead of the sharp “convergence” noted until the 1980s, there is lack of convergence and an indication of “divergence”. Second, the divergence is particularly marked during the 1990s. Third, spread of HIV/AIDS has probably been a significant factor in generating divergence during the 1990s. Fourth, besides the sizable temporal heterogeneity, quantile-regression estimates of convergence models reveal a substantial heterogeneity across the top and the bottom quartiles within each period.     

Do concentrated shareholdings mitigate the agency problem of “free cash flow”? some evidence

It is often argued that corporate managers tend to waste “free cash flow”. While the standard Berle-Means approach to corporate agency problems suggests that this behavior should be restricted to firms with atomistic shareholders, it is argued here that the effect of concentrated share ownership on the decision to disgorge “free cash flow” is ambiguous because concentrated ownership can blunt the disciplinary effect of a hostile takeover threat. The decision to pay out free cash flow in a sample of large U.S. corporations is found to be unrelated to the size of managerial, family or institutional blockholdings. This suggests that large shareholders are of no use in resolving the free cash flow problem, or that the importance of free cash flow as a source of agency problems has been greatly exaggerated.     

The optimal neglect of inflation: An alternative interpretation of UK monetary policy during the “Great Moderation”

This paper argues that UK monetary policymakers did not respond to the inflation rate during most of the “Great Moderation” that ran from the early 1990s to the mid-2000s. We derive a generalisation of the New Keynesian Phillips curve in which inflation is a non-linear function of the output gap and show that the optimal response of the policy rule to inflation depends on the slope of the Phillips curve; if this is flat, manipulation of aggregate demand through monetary policy does not affect inflation and so policymakers cannot affect inflation. We estimate the monetary policy rules implied by a variety of alternative Phillips curves; our preferred model is based on a Phillips curve that is flat when output is close to equilibrium. We find that policy rates do not respond to inflation when the output gap is small, a situation that characterised most of the “Great Moderation” period.     

Comment on “A note on the Hotelling principle of minimum differentiation: Imitation and crowd”

We argue that the minimum differentiation firm location equilibrium and the pure strategy pricing equilibrium in Di Cintio’s [Di Cintio, M., 2007. A note on the Hotelling principle of minimum differentiation: Imitation and crowd. Research in Economics 61 (3), 122–129] “Note” need not exist under the conditions claimed.     

Comment on “C.E.S. production functions in the light of the Cambridge critique”

The controversy revived in Bertram Schefold’s paper is based on three common assumptions: (1) the underlying techniques are linear (2) perfect competition obtains (3) the economy operates in a putty-putty context. The consequences of dropping these assumptions are discussed, and the relation between nonlinearity and the error due to the use of an “imprecise” production function is examined.     

The case for a “productivity norm”: Comment on Dowd

Instead of aiming for zero inflation, a “productivity norm” would allow permanent changes in the price level reflecting opposite changes in productivity or unit costs of production. Dowd (1995) disputes my claim that a productivity norm would be more conducive to macroeconomic stability than a stable price level. But Dowd's arguments succeed in undermining the case for a productivity norm only to the extent that they also undermine his own case for zero inflation.     

The Role of Absolute Continuity in “Merging of Opinions” and “Rational Learning”

D. Blackwell and L. Dubins (1962, Ann. Math. Statist.38, 882–886) showed that opinions merge when priors are absolutely continuous. E. Kalai and E. Lehrer (1993, Econometrica61, 1019–1045) use this result to show that players in a repeated game eventually play like a Nash equilibrium. We provide an alternative proof of merging of opinions that clarifies the role of absolute continuity while casting doubt on the relevance of the result. Persistent disagreement, the opposite of merging, allows the construction of a sequence of mutually favorable “bets.” By a law of large numbers, both agents are certain they will win these bets on average. This certain disagreement violates absolute continuity. Journal of Economic Literature Classification Numbers: C11, C69, C72, D83.     

Stabilizations, crises and the “exit” problem – A theoretical model

Exchange-rate-based stabilizations, even if successful, usually lack credibility initially. This is reflected in high (ex post) real interest rates and some degree of real exchange rate appreciation. Empirical observation suggests that wage inflation declines smoothly over time whilst interest rates are volatile. Our model captures these features and provides insights into: the eruption of exchange rate crises after a long period of apparently successful stabilization; the potential advantages of a heterodox approach; when to delay a stabilization attempt; and the optimal date for “exit” to a floating exchange rate.     

The “greening” of trade unions and the demand for eco-taxes

By embedding labour market bargaining considerations in an influence-seeking framework, we show how a union's stance on environmental policy depends on the exposure of their members to the risk of job loss. With a risk of unemployment, unions lobby with employers to resist stricter environmental policies. When employment is secure, unions may support policies that reduce employment opportunities for nonunion workers. “Environmentalism” can therefore arise without explicit environmental concerns among workers. Consequently, pollution taxes may yield a negative welfare dividend in the form of inefficiently high unemployment.     

Anonymous yes–no voting with abstention and multiple levels of approval

Symmetric (3,2) simple games serve as models for anonymous voting systems in which each voter may vote “yes,” abstain, or vote “no,” the outcome is “yes” or “no,” and all voters play interchangeable roles. The extension to symmetric (j,2) simple games, in which each voter chooses from among j ordered levels of approval, also models some natural decision rules, such as pass–fail grading systems. Each such game is determined by the set of (anonymous) minimal winning profiles. This makes it possible to count the possible systems, and the counts suggest some interesting patterns. In the (3,2) case, the approach yields a version of May's Theorem, classifying all possible anonymous voting rules with abstention in terms of quota functions. In contrast to the situation for ordinary simple games these results reveal that the class of simple games with 3 or more levels of approval remains large and varied, even after the imposition of symmetry.     

Formal schooling and workforce participation in a rapidly developing economy: evidence from “compulsory” junior high school in Taiwan

Using 18 consecutive household surveys, this study explores the impact of Taiwan's extension of tuition-free education from 6 to 9 years upon schooling and labor market outcomes (participation, sector/class of activity, and work income). I estimate upward shifts relative to preexisting trends of more than 0.4 years of education for males and 0.25 years for females in the first six cohorts affected by “compulsory” junior high schooling. Utilizing inter-cohort variation within an instrumental variables (IV) strategy, I find larger effects of schooling on females' workforce participation and total earnings, even controlling for selection.     

On the dynamic effects of using hired labor in the Kibbutz—theory and case studies

This study analyzes the effect of employing hired labor in the Kibbutz. The main motivations are the premises contained in the newly emerging “The Change” or “The New Kibbutz” approach. Using the traditional LMF model with heterogeneous labor, we show that, although using hired labor will improve the economic situation of the Kibbutz in the short-run, in the long-run Kibbutz membership will consist of only those types of labor to which the “Self Labor” principle applies.     

FROM MY PERSPECTIVE: VIII. Continuum of change: Perspectives on physical or “hard” sciences

This article, the eighth in a series on the new millennium, describes timelines that provide the setting and context for basing very long forecasts. The longer and more complete the historic patterns of past and present, coupled with conceptual possibilities and prospective developments, the clearer the pattern of ongoing incremental change becomes. Likely patterns of continuing change literally “pop out” when assessing such chronologies. Feasibility, credibility and practicality of 1000 year forecasting typically is dismissed out-of-hand. To help dispel such mindsets, timelines covering wide-ranging natural science phenomena spanning thousands to billions of years are presented here. Depicting the coming and going of familiar natural science phenomena in this manner reveals how the future fate of the world we live in is predetermined. These very long horizons suggest potentials for projecting physical science possibilities a mere 1000 years into the future.     

Technological generalizations and leitbilder—the anticipation of technological opportunities

Recent national technology foresight studies as well as the Millennium Project of the American Council for the United Nations University are very much based on “nodes of discussion.” These short statements are called, e.g., topics, issues, or developments. This article provides a framework for the classification and analysis of nodes related to future technological development. Key concepts of the article are “technological generalization” and “leitbild.” The topics in the technology foresight Delphi studies can be seen as different kinds of generalizations from already realized technological developments. Leitbild is a German word. Its most general meaning is a guiding image. Like a common vision, a leitbild creates a shared overall goal, offers orientation toward one long-term overall goal, and provides a basis for different professions and disciplines to work in the same direction. The analysis of leitbilder and emerging technological paradigms might contribute to the construction of topics and issues and to the argumentation processes related to them.