Regional Developments by Making Intellectual Property Public Domain

In this paper, the Japanese methods of regional developments with media contents are being analyzed. Taking Hokkaido or Sakaimitato as examples, the effects on the tourism with media contents will be explained in detail. Then, as a new idea, the concept of local consumed intellectual property will be proposed. Finally, the measures of solution of copyright which is difficult to deal with when using media contents would be discussed by including legislations.     

American step-up and step-down default swaps under Lévy models

This paper studies the valuation of a class of default swaps with the embedded option to switch to a different premium and notional principal anytime prior to a credit event. These are early exercisable contracts that give the protection buyer or seller the right to step-up, step-down, or cancel the swap position. The pricing problem is formulated under a structural credit risk model based on Lévy processes. This leads to the analytic and numerical studies of several optimal stopping problems subject to early termination due to default. In a general spectrally negative Lévy model, we rigorously derive the optimal exercise strategy. This allows for instant computation of the credit spread under various specifications. Numerical examples are provided to examine the impacts of default risk and contractual features on the credit spread and exercise strategy.     

Payoff dominance and risk dominance in the observable delay game: a note

We examine whether the payoff dominant sequential-move (Stackelberg) outcome is realized when timing is endogenized. We adopt the observable delay game formulated by Hamilton and Slutsky [Games Econ Behav 2(1):29–46, 1990]. We find that if one sequential-move outcome is payoff dominant, either (i) the outcome both players prefer is the unique equilibrium; or (ii) two sequential-move outcomes are equilibria and the one both players prefer is risk dominant. In other words, no conflict between payoff dominance and risk dominance in the observable delay game exists, in contrast to other games such as (non pure) coordination games. We also find that even if one of two sequential-move outcomes is the unique equilibrium outcome in the observable delay game, it does not imply that the equilibrium outcome is payoff dominant to the other sequential-move outcome.      

Development of air pollutant emission factors under real-world truck driving cycle

The truck driving cycle was developed in Thailand using actual speed-time profile from trucks in suburban area. Driving data were separated into micro trips and the representative driving cycle was selected by matching micro trips statistics and target statistics. The Performance Value (PV) was considered for selecting the representative driving cycle. This selected driving cycle was then used as input data for estimating emission factors of 4 air pollutants and 3 greenhouse gases by the International Vehicle Emission (IVE) model. Results were then compared with emission factors developed using the European Transient Cycle (ETC). Additionally, a comparison was made between emission factors calculated in this study and direct measurements of emissions from truck driven on chassis dynamometer under the European driving cycle. Comparison results revealed that CO, NO_x and CO₂ emission factor were about 2.05, 2.24 and 1.78 times lower than those obtained from direct measurements. PM emission factor was about 0.89 times higher than measured data. This study confirms the need to considered actual fleets and characteristics of vehicular sources when calculating their emission rates for further use in development of emission inventory.     

A new scheme for static hedging of European derivatives under stochastic volatility models

This study proposes a new scheme for static hedging of European path‐independent derivatives under stochastic volatility models. First, we show that pricing European path‐independent derivatives under stochastic volatility models is transformed to pricing those under one‐factor local volatility models. Next, applying an efficient static replication method for one‐dimensional price processes developed by Takahashi and Yamazaki (2008), we present a static hedging scheme for European path‐independent derivatives. Finally, a numerical example comparing our method with a dynamic hedging method under Heston's (1993) stochastic volatility model is used to demonstrate that our hedging scheme is effective in practice. © 2009 Wiley Periodicals, Inc. Jrl Fut Mark 29:397–413, 2009     

The Effects of Bequest Tax on Land Prices and Land Use

The paper examines whether bequest taxation affects land use, using an overlapping-generations model. In Japan, in assessing land for the purpose of inheritance taxation, the assessed value is less than the market value; however, other assets are valued at market value. Such an asymmetry creates a greater incentive for the older generation to hold land, because the probability of decease is higher for older than younger persons. With constant technology available in each generation, the inheritance tax is found to lead to inefficient land use, sluggish conversion of land over time and higher land prices.
JEL Classification Numbers: H24, R14.     

Policy reform and optimal inflation rate for Japan in computable OLG economy

We build a computable OLG model with monetary growth to calculate the optimal level of inflation rate for Japan, and to study policy reforms make any quantitative impacts on it. Four main results were obtained: (i) the optimal inflation rate for Japan is calculated around 1.0%; (ii) the calculated underlying inflation rate is about 9% under the present Japanese economic and fiscal situation; (iii) to prevent high inflation, fiscal reconstruction needs to be implemented; and (iv) if fundamental fiscal reform is conducted, the optimal inflation rate might be achieved. These results are very robust to calibration.     

Taxation in an Overlapping Generations Model with Human Capital

We examine the impact of flat-rate taxes on intergenerational equity in an overlapping generations model of a small open economy, assuming the intergenerational externality of human capital accumulation. The externality may cause the difference between the growth rates in private human capital and in average human capital of the economy. If the externality is sufficiently small, the introduction of an interest income tax will benefit all future generations. In contrast, if it is sufficiently great, the introduction of a wage tax could harm all generations by raising financial asset holdings and thereby reducing consumption.     

An optimal monetary policy in an aggregate neoclassical model of economic growth

This paper shows that the usual Ramsey-Cass-Koopmans optimal-growth theory is applicable to decentralized monetary economies and illustrates, with a simple model, how optimal growth can be achieved via a simple monetary policy. Securities and the endogeneity aspect of the money supply are explicitly introduced. This paper shows that the steady state under optimal growth is a saddle point, that the dynamic behavior of the capital-labor ratio and real per capita consumption is identical to that found in the usual literature in which money is not introduced, and that the optimal monetary policy is “counter-cyclical.”