A probabilistic model of location choice with neighborhood effects

This paper tries to develop a probabilistic model of location choice by many types of individuals who interact among themselves in the presence of neighborhood effects. Equilibrium is defined as an allocation of individuals among locations such that for every type of individuals the selection probability for each location is equal to the proportion of individuals actually choosing the location in question. The existence of equilibrium is proved under usual continuity assumptions. The equilibrium is shown to be unique and stable in the presence of neighborhood effects, if the degree of externality is sufficiently small.     

A note on land use in a square city

This paper considers a two-dimensional rectangular city with a grid road system, including a square city as a special case, and then derives a simple equilibrium traffic pattern in the case of constant road width. We maintain that while land-use decisions using market rents would lead to overallocation of land to transportation in our square city as in the Solow Vickrey long narrow city, the tendency towards excessive road-building is stronger near the city boundaries than at the city center in our two-dimensional case, contrary to the conclusion drawn from the Solow Vickrey model.     

Dynamics of metropolitan growth and unemployment

The author presents a demand-oriented model of metropolitan growth with explicit regard to urban unemployment and spatial growth. The long-term behavior of several factors, including population, is examined in response to exogenous demand growth for output     

Dynamics and comparative statics in the theory of residential location

This paper introduces a dynamic adjustment mechanism of residential boundaries among a finite number of household classes in a circular city model. First we derive some meaningful conditions for all the residential boundaries to be locally stable. Then, assuming that the stability conditions are satisfied, we examine the comparative static properties of equilibrium boundary positions, e.g., the effects of changes in a land tax, an income subsidy, the number of households, etc.     

The Role of Monetary Policy in Japan: A Break in the 1990s?

This article documents time series evidence suggesting the case for a possible structural break in the role of Japan's monetary policy during the 1990s. It uses a simple vector autoregressive framework and offers some suggestive results: While a persistent effect of monetary policy on real output is detected over the full sample of 1975–1998 and the subsample that ends in 1993, such effect disappears with the recent subsample of the 1990s. The stability analysis also provides more specified evidence that there is a break in the reduced form dynamic system in 1995. Some interpretations are offered to intuitively support these findings. J. Japan. Int. Econ., December 2000, 14(4), pp. 366–384. Research Institute for Economics and Business Administration, Kobe University, Rokko, Nada, Kobe 657-8501, Japan Copyright 2000 Academic Press.Journal of Economic Literature Classification Numbers: E52, E32.     

On the existence,uniqueness and stability of spatial equilibrium in an open city with externalities

This paper deals with the existence, uniqueness and stability of a spatial equilibrium in an open city with external diseconomies like air pollution generated by manufacturing activities. First, assuming that both production functions and utility functions are Cobb-Douglas, we prove the existence of a spatial equilibrium under some reasonable assumptions. It is shown, however, that the uniqueness and stability of the equilibrium may not be obtained, unless the degree of externality is sufficiently small. In fact, none of the equilibria will be stable for a certain set of speeds of adjustment in the labor market and the land market, if the degree of externality is relatively large. Finally, some implications of our results are derived in regard to the application of the hedonic price concept within the context of a spatial equilibrium model.     

The organization and relative productivity of Japanese and American industry

This paper compares the structure and productivity of Japanese and American firms. We construct a simple model of labor shares in which the ratio of labor payments to sales is the product of labor's share in take added and the degree of integration. According to Japanese and United States census data, labor shares in value added are fairly similar for Japanese and American firms, whereas the average degree of integration, and therefore the average ratio of payroll to sales of Japanese firms, is distinctly lower than that of their American counterparts, particularly in the machinery and equipment industries. From survey data on Japanese firms in California, we observed payroll-sales ratios that generally lie between values reported for Japan and the United Slates for the machinery and equipment industries. Assuming that Japanese firms in California employ the same technology as their US counterparts, we conclude that the average degree of integration of Japanese firms in California is at least 10% lower. As a result, even though the gross labor productivity of typical Japanese firms in the United States generally, and California in particular, is slightly higher, the former may well be less productive than the latter in terms of net lalmr productivity, measured by value added. While further corroboration is needed, it appears that differences in the extent of integration are an important factor that accounts for reported productivity difference between the two countries.     

Dynamic stability of an open city with many household classes

This paper analyzes the dynamic stability property of an “open” city with many classes of households. We specify a dynamic adjustment process of household movement into and out of the city in such a way that the number of households in each class increases or decreases over time, according as the utility level households can obtain in the city is higher or lower than a certain utility level attainable elsewhere. Then we prove that a long-run equilibrium is locally stable for positive speeds of adjustment under reasonable assumptions. Some comparative static properties are also explored.     

An application of the LeChatelier principle in location theory

An application of the LeChatelier principle in the field of location theory, particularly focusing on the effect of a change in the opportunity cost of land on the location of the outer boundary of a circular city with many industries, is demonstrated. It is shown that the effect on the outer city boundary will be greater, as more boundaries between industries inside the city are allowed to vary in response to a change in the opportunity cost of land.     

The golden rule of urban transportation investment

The purpose of this paper is to find an optimal taxation rule for transportation investment in an ever growing urban economy. First we dynamize a standard circular-city model with identical residents by introducing population growth and transportation improvements over time. Assuming that utility functions are of a constant-elasticity form and transportation investment is financed by an income tax, we prove the existence, uniqueness and stability of a balanced growth equilibrium for each given tax rate. Then, an optimal tax rate is determined so as to maximize the balanced growth equilibrium level of utility for every resident in the city. It is also shown that our simple rule remains valid in the case of two income classes.