Is it Abenomics or Post-Disaster Recovery? A Counterfactual Analysis

This study is an attempt to assess the impact of policy initiatives launched by Japan’s new Prime Minister Shinzo Abe on Japan’s real gross domestic product (GDP) in his first quarter in office. We use as a benchmark for measurement a counterfactual estimate of GDP. Since the Japanese economy is also in the midst of reconstruction from the 2011 Tohoku disaster in the first quarter of 2013, we first estimate the counterfactual GDP that would have materialized in the absence of that disaster. We will use a dummy variable method and the statistical method proposed by Cheng Hsiao and others. We check the validity of these methods with regard to the Kobe earthquake of 1995 and then estimate the post-disaster counterfactual GDP in the absence of the Tohoku disaster. We measure the impact of government policies as the difference between the actual and counterfactual GDP. By doing so, we conclude that government policies have failed to lift Japan’s GDP to the expected level. Even with the help of Abenomics, the gap remains in the range of 6 to 14 trillion yen per year.     

Has Abenomics Succeeded in Raising Japan's Inward Foreign Direct Investment?

Japan is known to have an exceptionally low level of inward foreign direct investment (FDI). The promotion of inward FDI is one of the policy goals of Abenomics structural reforms. This present paper studies the accumulation of Japan's inward FDI stock during the first 3 years of Abenomics (2012–2015), and finds no evidence that Japan's inward FDI stock increased more than the trend before Abenomics started would have predicted. A comparison of the main policies for promoting inward FDI that have been implemented to the real and perceived impediments to inward FDI reveals that it may be advisable to shift the emphasis of the policy to address more regulatory and administrative issues and to reduce the cost of doing business in Japan.     

Did the EMS encourage inflation convergence?

This paper studies the convergence of inflation rates over the period of 1983–93 for some countries within the European Monetary System. Three different price indices are considered for consumer goods, services, and industrial products. This study focuses on the difference between core and peripheral countries for measuring convergence speed. By using - and -convergence tools, as previously identified in studies on output growth convergence, it was found that the convergence process did not evolve equally whether considered through price indices, time, or countries.     

Did Japan's shopping coupon program increase spending?

In March 1999, 31 million “shopping coupons” worth 20,000 yen each were distributed to Japanese families with children and to the elderly. The coupons expired after six months and could only be used within the recipient's local community. We use variation in the number of children across families and in the number of recipients across prefectures to measure the effect of the coupons on spending. We find that coupons had a positive effect on spending on semi-durables, but no effect on spending on nondurables or services. The marginal propensity to consume on semi-durables was 0.1–0.2 when the coupons were distributed in March. The results using regional variation provide stronger evidence that spending did not fall after the coupons had been redeemed.     

Hayek and the Great Depression of 1929: Did he really change his mind?

The aim of this research is to establish whether, and if so in what way, Hayek changed his mind about the Great Depression of 1929.The work is divided into two parts. In the first part, I present the ‘early’ Hayek of the 1930s. Hayek was the great rival of Keynes. Both explained the Great Depression, applying opposing business cycle theories. For Keynes, the crisis was caused by an excess of saving over investment; for Hayek, on the contrary, by an excess of investment over saving. In the early 1930s, Röpke attempted a synthesis, positing that a recession due to overinvestment can degenerate, as in 1929, into a depression caused by oversaving. Hayek examined and rejected Röpke's theory. In the second part, I present the ‘later’ Hayek of the 1970s. After years of silence and solitude, Hayek was unexpectedly awarded the Nobel Memorial Prize in Economics, precisely for the contribution he made in the 1930s to the theory of the business cycle. Hayek returned to his pursuit of the ghost of Keynes, debated with his friend and rival Friedman, re-examined Röpke's special case and, according to Haberler, changed his mind. In my conclusion, I attempt to resolve the dilemma.     

Did established Early Warning Signals predict the 2008 crises?

Over the past 60 years, a voluminous literature has painstakingly developed crises theories and their associated Early Warning Signals. The hallmark of this literature is the consistency with which selected Early Warning Signals, such as the level of reserves and exchange rate appreciations, are presumed to predict different types of crises across countries and time. The diversity of crises theories that motivate Early Warning Signals presents, however, a challenge to empirical implementations. Given that the true model of Early Warning Signals is unknown, omitted variable bias contaminates estimates and confidence levels when the uncertainty surrounding a particular theory has been ignored. After addressing model uncertainty in Early Warning Signal regressions, using an extended version of Frankel and Saravelos (2012. J. Int. Econ. 87, 216–231) dataset, we do not find a single Early Warning Signal that alerts to all dimensions of the 2008 crisis. Instead, distinct sets of Early Warning Signals identify different dimensions of the crisis: banking, balance of payments, exchange rate pressure, and recession.     

Did the euro give us a break in inflation?

The introduction of the euro was accompanied by promises of lower inflation rates; however, the public feels that inflation increased when the euro was introduced. Officials admit that certain sectors experienced substantial price increases, but they claim that the overall inflation rate did not increase. This paper investigates whether inflation in 15 European countries experienced a structural break after the euro was introduced using new powerful and serial correlation robust test statistics. We find evidence that the European Monetary Union (EMU) countries experienced a positive break in inflation after 1999. Our results demonstrate that inflation just after the introduction of the euro was higher relative to the inflation just prior to the introduction of the euro. Additionally, we find no evidence of positive breaks for the non-EMU countries when the euro was introduced.     

Koizumi carried the day: Did the Japanese election results make people happy and unhappy?

This paper investigates whether the Japanese people were happy and unhappy with the general election conducted on September 11, 2005, in which the Prime Minister, Koizumi, won a landslide victory. We conducted a large survey just after the election to ask people how happy they were and which party they had supported. Although there are consistent tendencies that supporters of ruling parties were happier and supporters of opposition parties were unhappier, the effect was not significant. Considering the results of previous studies that showed that Americans demonstrated significant responses to the result of a presidential election, this study suggests that the Japanese people are indifferent to politics.     

Did immigration contribute to wage stagnation of unskilled workers?

In this paper we first show that the timing and skill distribution of Immigrants to the U.S. between 1970 and 2014 imply they did not contribute to the decline in the wages of native, non-college educated workers – including high school dropouts – at the national level. We then review other evidence at the local level, which implies immigration is not associated with lower non-college wages. Rather, higher immigration seems associated with higher average (and college-level) wages. Local externalities, complementarities, efficient specialization and appropriate technological choice suggest at least part of the positive association is causal.     

Did Hayek have a monetary theory of business cycles?

Joseph Schumpeter, a careful reader of Hayek, categorized Hayek??s theory of economic cycles as non-monetary. Almost every other source, including Hayek himself, categorized the theory as monetary. The issue turns on the concept of causality being used. The question of what causality concept to apply to complex phenomena has substantive implications for economic theory. A simple concept of causality, appropriate to the study of some physical phenomena, will mislead when applied to complex phenomena. We provide examples of errors in analysis that follow from the wrong choice of a causal paradigm.     

Did the Supreme Court just do you a favor?

By permitting depreciation of patient lists, the judges gave both buyers and sellers of medical practices a chance to make a better--but not great--deal.     

Did financial deregulation help consumers? Access to market-yield instruments

The maturity effect (ME) of futures prices postulated by Samuelson (1965) is re-examined using three nonparametric tests. The consistent entropy asymmetry test by Racine and Maasoumi (2007) indicates that variance is an appropriate risk or uncertainty measure for ME, and value-at-risk and expected shortfall are also adopted. The Kolmogorov–Smirnov dominance test and Wilcoxon rank sum and signed rank test are employed to rank the estimates of the three risk measures under a moving-window framework. The testing outcomes are contingent on futures type, testing method and risk measures. The testing outcomes show mild support for ME.     

How Did Economists Get It So Wrong?北大核心CSSCISSCI

FROM SMITH TO KEYNES AND BACK The birth of economics as a discipline is usually credited to Adam Smith,who published The Wealth of Nationsin 1776. Over the next 160 years an extensive body of economic theory was de-veloped, whose central message was:     

Beer and the Tie: Did Divestiture of Brewer-owned Public Houses Lead to Higher Beer Prices?

In 1989, the United Kingdom Monopolies and Mergers Commission (MMC) recommended measures that eventually led brewers to divest themselves of 14,000 public houses. The MMC claimed that their recommendations would lower retail prices and increase consumer choice. Since that time, however, retail prices have risen. This paper contains an econometric analysis of the transition period. The analysis is based on a model of the relationship between retail price and retail-organisational form that emphasises how exclusive-dealing clauses and strategic factors interact     

Did monetary or technology shocks move euro area stock prices?

Using a Bayesian vector autoregressive (VAR) model, I investigate the impact of monetary and technology shocks on the euro area stock market. I find an important role for technology surprise shocks, but not monetary shocks, in explaining variations in real stock prices. Specifically, the pronounced boom?Cbust cycle of 1995?C2003 is largely due to technology surprise shocks. The identification method allows me to study the effects of technology news shocks. The responses are consistent with the idea that news on technology improvements has an immediate impact on stock prices. These findings are robust to several modelling choices, including the productivity measure, the specification of the VAR model, and the identifying restrictions.     

Did China tire safeguard save U.S. workers?

Although temporary trade barriers are perceived as a feasible policy instrument for securing domestic jobs in the presence of increased globalization and economic downturns, no study has assessed whether such temporary barriers have actually saved domestic jobs. To overcome this deficiency, we evaluate the China-specific safeguard case on consumer tires petitioned by the United States. Contrary to claims made by the Obama administration, we find that total employment and average wages in the tire industry were unaffected by the safeguard. Further analysis reveals that this result is not surprising as we find that imports from China are completely diverted to other exporting countries partly due to the strong presence of multinational corporations in the world tire market.     

Did Competition Drive Down the Profitability of China's State-owned Enterprises?

MOCT-MOST: Economic Policy in Transitional Economies -