Comparative statics in the large based on a fixed point algorithm

The purpose of this paper is to present a theorem on comparative statics in the large by making use of theorems on a fixed point algorithm, and also to show its economic applications focused on Hicksian laws. We provide a unified approach to comparative statics in the large, and obtain laws of demand globally valid for generalized gross-substitute systems.     

Product Variety and Real Exchange Rates: The Balassa-Samuelson Model Reconsidered

This paper introduces product variety into the Balassa-Samuelson model in order to extend the model of real exchange rate determination. With product differentiation, real exchange rates depend not only on the relative price of nontradables to tradables but also on relative prices among tradables. This paper identifies a new factor that determines the extent of variety, termed Infrastructural Technology, and that affects real exchange rates not through the relative price of nontradables but through relative prices among tradables. This paper also conducts empirical tests, and the results of these tests support the model. Received May 31, 2001; revised version received March 20, 2002 Published online: April 30, 2003     

Quasi-stationary cardinal utility and present bias

This note gives an axiomatic foundation for utility exhibiting quasi-geometric discounting. In addition, it introduces a wider class of utility functions satisfying weakened stationarity, called quasi-stationary utility. Both are established as von Neumann-Morgenstern utility indices in a model of risk preference.     

Generalized potentials and robust sets of equilibria

This paper introduces generalized potential functions of complete information games and studies the robustness of sets of equilibria to incomplete information. A set of equilibria of a complete information game is robust if every incomplete information game where payoffs are almost always given by the complete information game has an equilibrium which generates behavior close to some equilibrium in the set. This paper provides sufficient conditions for the robustness of sets of equilibria in terms of argmax sets of generalized potential functions. These sufficient conditions unify and generalize existing sufficient conditions. Our generalization of potential games is useful in other game theoretic problems where potential methods have been applied.     

South Korea’s finance–growth nexus: evidence from VARX analysis with financial crisis and openness

South Korea’s finance–growth nexus is empirically investigated by taking the elements of financial crisis and trade and financial openness through the newly developed approach of vector error-correction models (ECMs) with weakly exogenous I(1) variables (VARX). Considering financial development as a more complex phenomenon, we take into estimation two aspects of financial deepening that are measured by its size (private credit to GDP) and efficiency (private credit to total domestic deposits). The main findings are (1) financial efficiency contributes to accelerating economic growth; (2) the causality between economic growth and financial size is bilateral and negative; and (3) financial crisis is negative to both economic growth and financial development, whereas the growth-promoting effects of trade and financial openness are confirmed.     

Integrating business modeling and roadmapping methods - The Innovation Support Technology (IST) approach

The purpose of this paper is to report the integration studies of business modeling and roadmapping methods for the “Innovation Support Technology (IST)” and the IST's practical application to real-world cases. The IST is conducted for the purpose of offering a convenient tool for engineers and researchers in order to enhance corporate value from R&D outputs. “Japan's lost decade” has forced companies to change R&D management and R&D operation style, especially regional industries. We propose the framework for revitalization of regional industries by using the Strategic Technology Roadmap made by the Ministry of Economy, Trade and Industry (METI-TRM) with business modeling. We applied this IST method to several real-world cases to show its effectiveness. This study represents the result of over four years (fall 2002) of work with the value creation framework of the business modeling method for R&D outputs, done by a group of researchers from JATES (Japan Techno-Economics Society).     

Interim efficient allocations under uncertainty

This paper considers an exchange economy under uncertainty with asymmetric information. Uncertainty is represented by multiple priors and posteriors of agents who have either Bewley's incomplete preferences or Gilboa-Schmeidler's maximin expected utility preferences. The main results characterize interim efficient allocations under uncertainty; that is, they provide conditions on the sets of posteriors, thus implicitly on the way how agents update the sets of priors, for non-existence of a trade which makes all agents better off at any realization of private information. For agents with the incomplete preferences, the condition is necessary and sufficient, but for agents with the maximin expected utility preferences, the condition is sufficient only. A couple of necessary conditions for the latter case are provided.     

Increasing marginal impatience and intertemporal substitution

For infinite-horizon models with recursive preferences the condition known as increasing marginal impatience is often adopted, but the condition is not fully understood in the literature. This paper shows that increasing marginal impatience is equivalent to the intuitive property that the substitutability between the consumption levels in two different periods is a decreasing function of the distance between the periods.