Characterizing belief-free review-strategy equilibrium payoffs under conditional independence

This paper proposes and studies a tractable subset of Nash equilibria, belief-free review-strategy equilibria, in repeated games with private monitoring. The payoff set of this class of equilibria is characterized in the limit as the discount factor converges to one for games where players observe statistically independent signals. As an application, we develop a simple sufficient condition for the existence of asymptotically efficient equilibria, and establish a folk theorem for N-player prisoner?s dilemma. All these results are robust to a perturbation of the signal distribution, and hence remain true even under almost-independent monitoring.     

Economic Integration in East Asia: An International Input‐Output Analysis

To establish economic and monetary union (EMU) in East Asia, deepening regional integration through international trade is important. The economic interdependence (one of the important criteria for regional integration) study, using macro data does not reflect the indirect effects generated by interactions between different production sectors and different countries. We use the international input‐output (IIO) framework to study the economic interdependence at both macro and production sector levels. We refine the existing methods to reflect exogenous country effect and size effect of the economy. Our study suggests that establishing EMU in East Asia appears to be somewhat premature. However, we can be more optimistic for regional integration at the production sector level in East Asia when including Japan, which will create a basis for EMU in the region.     

A limit characterization of belief-free equilibrium payoffs in repeated games

The present paper studies repeated games with private monitoring, and characterizes the set of belief-free equilibrium payoffs in the limit as the discount factor approaches one and the noise on private information vanishes. Contrary to the conjecture by Ely et al. [J.C. Ely, J. Hörner, W. Olszewski, Belief-free equilibria in repeated games, Econometrica 73 (2005) 377-415], the equilibrium payoff set is computed by the same formula, no matter how many players there are. As an application of this result, a version of the folk theorem is established for N-player prisoner's dilemma games.     

Learning from private information in noisy repeated games

We study the perfect type-contingently public ex-post equilibrium (PTXE) of repeated games where players observe imperfect public signals of the actions played, and both the payoff functions and the map from actions to signal distributions depend on an unknown state. The PTXE payoffs when players are patient are determined by the solutions to a family of linear programming problems. Using this characterization, we develop conditions under which play can be as if the players have learned the state. We provide a sufficient condition for the folk theorem, and a characterization of the PTXE payoffs in games with a known monitoring structure.     

Aid effectiveness,governance and public investment

In this paper, we develop a growth model in which aid finances infrastructure investment and pro-poor spending in order to analyze ways through which aid can be made more effective. We assume that the recipient countries are aid-dependent in the early phase of development and that they ultimately become independent. In the model, donors can accelerate a recipient's independence from aid by investing in infrastructure. We demonstrate that even a small increase in aid can improve aid effectiveness and that aid effectiveness depends more on the growth rate than on the efficiency of the government.     

Terms of trade and full capacity growth in a resource-importing economy

The paper deals with a neoclassical growth model of an economy which has to import all the natural resources needed as nonsubstitutable industrial inputs in proportion to gross output. Depending on the internal and external conditions, one of two contrasting economic paths prevails: (1) a path with rising terms of trade and increasing capital/output ratio and (2) a path with falling terms of trade and declining capital/output ratio that could lead to ‘immiserising growth.’ Certain boundary conditions that distinguish the two cases are discussed.     

The Invisible Multipliers of Joint-products

This paper proposes a hybrid input-output model to estimate the intermediate requirements embodied in the final disposal--such as reclamation and incineration - of non-marketable scraps and wastes from industries or households. The model is based on a mixed technology assumption in order to connect the monetary distribution of the ordinary goods and services with the physical distribution of the scraps and wastes as joint-products. Moreover, some demand-pulled invisible multipliers, in terms of the scraps and wastes, have been explored by performing a numerical simulation. From the invisible multipliers, we find the paradoxical phenomenon that the reduction in the amount of final disposal and the promotion of material recycling decreases the intermediate demand of the scraps and wastes for material recycling if there is a time-lag in the introduction of the appropriate recycling technology.     

Does aid affect inequality?

We show that there was a negative correlation between pro-poor aid and inequality in the period before the mid-2000s. This article provides an explanation for this observed relationship. Using panel data on 34 countries for the period 1996–2014, we test the hypothesis that pro-poor aid has an inequality-reducing effect. To demonstrate that the negative correlation is not spurious, we use dynamic panel techniques with alternative specifications. We show that the share of pro-poor aid has a negative effect on inequality. In addition, we show that the interaction term between the poverty rate and the change in pro-poor aid has a significant effect. These empirical results are consistent with our theoretical predictions. The results imply that aid can reduce inequality by altering the allocation of aid, rather than by increasing the amount of aid.