THE SAVING RATE IN JAPAN: WHY IT HAS FALLEN AND WHY IT WILL REMAIN LOW*

Japan is in the midst of a demographic transition that is larger and more rapid than other OECD countries. We are interested in understanding the role of lower fertility rates and aging for the evolution of Japan's national saving rate. We use a computable general equilibrium model to analyze the response of the saving rate to changes in demographics and total factor productivity. In our model demographic factors account for 2–3 percentage points of the 9% decline in the saving rate between 1990 and 2000 and persistently depress the saving rate in future years.     

Multiple-objective methods in regulatory decision making: A conceptual framework applied to U.S. automobile safety standards

Public policy making is a complex matter. Policy makers are charged with balancing a broad spectrum of competing objectives, reflecting in varying degrees the interests and aspirations of a diverse range of constituencies and stakeholders. Policy decisions have differential impacts on differing constituencies and the contributions of these impacts to objectives are frequently uncertain, difficult to quantify, and hotly disputed. Formal methods of decision analysis have been advanced as aids for coping with complexity and have been applied to some public policy issues, most notably the management of water resources. While formal methods have the apparent benefit of rationalizing the policy process and improving the efficacy and equity of policy decisions, serious questions remain concerning the acceptability and ultimate usefulness of formal analyses in the public arena. In this article we examine these questions in the context of policy making relating to government regulation of automobile designs for safety. We consider what would be involved in attempting to use a relatively modern, multiple-objective approach in this context. The key questions are how and, more importantly, why multiple-objective methods might be used. The article begins with an illustrative case study, describes the current policymaking process, identifies the parties involved in and affected by this process, elicits key objectives, looks briefly at some scalar-objective approaches, and then outlines a multiple-objective approach. The framework developed arguably is useful in assisting policy making, at least at a qualitative level. Issues which impede a more quantitative resolution of this framework are discussed. This article is intended as a pilot study which may promote research toward the achievement of a useable multiple-objective procedure applicable in the public domain.     

Fate control and leisure attitudes

It has been suggested that attitudes toward leisure may be affected by one's perception of the ability to control life's consequences. Rotter's I‐E scale was used in the present study to measure the perceived locus of control and was correlated with the scales of Neulingers Leisure Attitude Inventory. Results indicated that positive attitudes toward leisure were generally more associated with an external than an internal locus of control, i.e., with the perception that one's fate is to a large degree personally uncontrollable. These results are explained in terms of the confounding influence of work/achievement orientation in the measurement of and in the relationship of those variables. Implications for leisure counseling, leisure education, and therapeutic recreation are also discussed.     

The Ethics of Meaningful Work: Types and Magnitude of Job-Related Harm and the Ethical Decision-Making Process

This research on the ethics of meaningful work examined how types of job-related harm (physical, economic, emotional, and cognitive) and their magnitude of consequences (MOC, low, high) influenced components of ethical decision-making (moral recognition, moral evaluations, and moral intentions). The research also investigated the moderating effects of individual differences (experience with carpal tunnel syndrome, experience with layoffs, ability to read others’ emotions, and intrinsic motivation orientation [IMO]) on the relation between the MOC and the ethical decision-making elements for each type of harm. Using a sample of 185 Chinese professionals, a between-subjects, fully crossed experimental scenario design revealed that physical and economic job-related harm were recognized as moral issues to a greater extent than cognitive or emotional harm. Second, physical job-related harm stimulated a higher level of moral evaluations than economic and cognitive harm. Third, individuals intended to act ethically when MOC was high versus low. Finally, experience with layoffs and IMO helped explain the relations between MOC and moral evaluations for economic and cognitive job-related harm, respectively. Implications for research and management are discussed.     

Anonymity in Computer-Mediated Communication: More Contrarian Ideas with Less Influence

Anonymity is thought to be an important means for ensuring a free exchange of ideas by encouraging the expression of minority viewpoints. However, we suggest that anonymity’s reduction in awareness of others potentially affects the expression and interpretation of comments that are made during a discussion. In particular, anonymity will increase the likelihood that comments will be made that are contrary to the majority opinion while at the same time decreasing the effect that those contrary arguments have on other group member’s opinions. This paper reports experimental results showing that anonymity led to more overall participation in discussions of ethical scenarios. However, equality of member participation did not differ between anonymous and member-identified groups, and anonymous groups had significantly higher awareness-related comments. This leads to the conclusion that additional participation in anonymous groups accommodates reduced awareness rather than reflecting the increased participation of normally reticent group members. In addition, anonymity led to more arguments in support of questionable behavior, suggesting that the freeing effects of anonymity apply to the social desirability of arguments. Finally, there was less change in opinion under conditions of anonymity than when comments were identified, suggesting that anonymous arguments have less influence on opinions than identified comments.     

CBO’s Outlook for the Economy in February 2014

These remarks summarize the economic forecast and budget outlook that the Congressional Budget Office (CBO) published in February 2014. The discussion has not been updated to reflect subsequent economic and budget data or subsequent projections by CBO. Under an assumption that current laws governing federal taxes and spending remain in place, CBO projects that real GDP will expand by roughly 3 percent between the fourth quarter of 2013 and the fourth quarter of 2014—the largest rise in nearly a decade. Similar annual growth rates are projected through 2017. Nevertheless, CBO estimates that the economy will continue to have considerable slack for the next few years. To a large degree, the slow recovery of the labor market since the official end of the recession in 2009 reflects slow growth in the demand for goods and services. To a smaller degree, that slow recovery is the result of structural factors that stem from the recession and the subsequent weak growth of output but that are not directly related to the economy’s current cyclical weakness. The unemployment rate is expected to remain above 6.0 percent until late 2016. Moreover, labor force participation is projected to move only slowly back toward what it would be without the cyclical weakness in the economy. Beyond 2017, CBO expects that economic growth will be well below the average seen over the past several decades, primarily because of slower growth in the labor force arising from the aging of the population. Inflation, as measured by the change in the price index for personal consumption expenditures, is expected to remain at or below 2.0 percent throughout the next decade. Interest rates on Treasury securities are projected to increase in the next few years as the economy strengthens. The federal budget deficit has fallen sharply during the past few years, and it is on a path to decline further this year and next year. However, if current laws remain unchanged, the deficit will increase again after a few years because revenues are expected to grow at roughly the same pace as GDP whereas spending is expected to grow more rapidly. Federal debt held by the public is expected to equal 74 percent of GDP at the end of this year and close to 80 percent a decade from now.     

Experimental Methods for the General Economist: Five Lessons from the Lab

I review five primary results from experimental economics that impact the economics profession as a whole. These results regard the relative (un)importance of subject sophistication in laboratory markets, the importance of gender on economic outcomes, the propensity for humans to behave in less than fully rational ways, the importance of trading institutions on economic performance, and the behavioral relevance of economic theory. I find that economics as a profession has benefited from the use of experimental methods by fostering a dialogue between theorists and empiricists, better informing policy and improving data collection techniques.     

Monetary shocks, the exchange rate, and the trade balance

This paper investigates the response of the exchange rate and the trade balance to monetary policy innovations for the US economy during the period 1973:01–1993:12. The empirical findings indicate that contractionary monetary policy shocks lead to transitory appreciations of the real and the nominal exchange rate. Exchange rate appreciations that are caused by a temporary contractionary shock to monetary policy are correlated with a short-lived improvement in the trade balance which is then followed by a deterioration, giving support to the J-curve hypothesis.     

A Law and Finance Analysis of Hedge Funds

This paper empirically analyzes the impact of hedge fund regulation on fund structure and performance. The data indicate restrictions on the location of key service providers and permissible distributions via wrappers are associated with lower fund alphas, lower average monthly returns, and higher fixed fees. Furthermore, restrictions on the location of key service providers are associated with lower manipulation-proof performance measures, while wrapper distributions are associated with lower performance fees. As well, the data show standard deviations of monthly returns are lower among jurisdictions with restrictions on the location of key service providers and higher minimum capitalization requirements.