A substitution orbit model of competitive innovations

Successful innovation and diffusion of technology can be attributed to the identification of the orbit of emerging new technologies that complement or substitute for existing technologies. This dynamism resembles the co-evolution process in an ecosystem. In an ecosystem, in order to maintain sustainable development, the complex interplay between competition and cooperation, typically observed in predator-prey systems, create a sophisticated balance. Given that an ecosystem can be used as a masterpiece system, this sophisticated balance can provide suggestive ideas for identifying an optimal orbit of competitive innovations with complement or substitution dynamism.Prompted by such a sophisticated balance in an ecosystem, this paper analyzes the optimal orbit of competitive innovations and, on the basis of an application of Lotka-Volterra equations, it reviews substitution orbits of Japan's monochrome to color TV system, fixed telephones to cellular telephones, cellular telephones to mobile Internet access service, and analog to digital TV broadcasting. On the basis of substitution orbits analyses, it attempts to extract suggestions supportive to identifying an optimal policy option in a complex orbit leading to expected orbit.Key findings include policy options that are effective in controlling parameters for Lotka-Volterra equations leading to expected orbit.     

Long-term effects of labor market conditions on family formation for Japanese youth

This study aims to examine how each cohort’s family formation is affected by labor market conditions experienced in youth in Japan. Although the deterioration in youth employment opportunities has often been blamed for Japan’s declining fertility rate, the effect of slack labor market conditions on fertility is theoretically unclear. We estimate the effects of regional labor market conditions at entry to the labor market and contemporaneous conditions on fertility, controlling for nation-wide year effects and prefecture fixed effects, and find the following. First, high school-educated women who experienced a recession while entering the labor market are less likely to have children. In contrast, a recession rather increases fertility among college-educated women. When summed up, the aggregate impact of labor market conditions experienced in youth on fertility is weak. Second, the unemployment rate at entry to the labor market is positively correlated with the probability of having two or more children conditionally on having at least one child. Third, the contemporaneous unemployment rate is negatively correlated with marriage of women in the local labor market, although the correlation is weak and concentrated on the less educated group.     

An Hedonic Analysis of the Rental Office Market in the Tokyo Central Business District: 1985–1994 Fiscal Years

We study the rental office market in the Tokyo central business district by estimating hedonic equations for the office rent for 1985–94 fiscal years. This period includes the "Bubble" of asset prices, followed by its deflation. We find that the characteristics related to transportational conveniences are less effective in explaining office rents than the characteristics related to the agglomeration of offices and the amenity characteristics of the office buildings themselves. Using a skewed error-term specification, we show that the discount in rental transactions is not irrelevant. The hedonic office rent indices and possible policy implications are also presented.
JEL Classification Numbers: L85, R32.     

Venture Capital and Other Private Equity: a Survey

We review the theory and evidence on venture capital (VC) and other private equity: why professional private equity exists, what private equity managers do with their portfolio companies, what returns they earn, who earns more and why, what determines the design of contracts signed between (i) private equity managers and their portfolio companies and (ii) private equity managers and their investors (limited partners), and how/whether these contractual designs affect outcomes. Findings highlight the importance of private ownership, and information asymmetry and illiquidity associated with it, as a key explanatory factor of what makes private equity different from other asset classes.     

Asymmetric Effect of Currency Union for Developing Countries

The large effect of currency union on trade volume has been well documented by Rose (2000). However, the effect of currency union on trade balance has hardly been previously reported. In this study, the effect of currency union is found to differ substantially across imports and exports when a developing country trade with developed country that anchors the currency. To ensure that the asymmetric effect does not come from the specific nature of countries that have adopted a common currency or endogeneity of currency union, we test the same hypothesis using nominal exchange rate volatility and real exchange rate level.     

International linkage of inflation rates in a dynamic general equilibrium

This paper uses the Neumeyer?CYano??s monetary dynamic general equilibrium model to investigate the inter-connectivity of the world economy through bond holding beyond national borders. The possibility that unexpected inflation in one country transmits to another is demonstrated within a framework in which the nominal exchange rate is flexibly determined so that the purchasing power parity holds. Deflation can also be imported through the same channel. Whether inflation or deflation diffuses internationally depends on the level of fiscal deficit. Although a country may suffer from monetary disturbances from abroad, each country can completely defend itself by implementing appropriate fiscal policies.     

The role of institutional investors in propagating the crisis of 2007–2008

Using novel data on investors' bond portfolios, we study the contagion of the crisis from securitized bonds to corporate bonds. When securitized bonds became “toxic” in August 2007, mutual funds retained the now illiquid securitized bonds and sold corporate bonds. Funds with negative flows or high liquidity needs liquidated more than others. Yield spreads increased more for corporate bonds whose pre-crisis bondholders were more heavily exposed to securitized bonds, compared to same-issuer bonds held by unexposed investors. The findings suggest that liquidity-constrained investors with exposure to securitized bonds played a role in propagating the crisis from securitized to corporate bonds.     

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.     

Hypothetical extractions from a global perspective

ABSTRACT

The hypothetical extraction method (HEM) has been widely used to measure interindustry linkages and the importance of industries. HEM considers the hypothetical situation in which a certain industry is no longer operational. HEM was developed for national economies, using national input–output tables. When performing HEM, it is assumed (often implicitly) that the input requirements that were originally provided by the extracted industry are met by additional imports in the post-extraction situation. Applying HEM to global multiregional input–output tables then causes serious problems. It is no longer sufficient to assume that the required inputs are imported. Instead, it is necessary to indicate explicitly how much is imported from each origin to replace the original inputs. Our adaptation of HEM is the global extraction method (GEM). As an illustration, GEM is applied to the extraction of the motor vehicle industry in China, the US, and Germany, using the 2014 WIOD input–output table.