Japanese fiscal reform: fiscal reconstruction and fiscal policy

This paper evaluates the recent movement of Japanese fiscal reform. We first summarize fiscal policy in 1990s. Then, we investigate several relevant topics of fiscal policy such as the macroeconomic impact of government debt and the sustainability problem. We then consider dynamic properties of fiscal reconstruction process by analyzing the dynamic game among various interest groups. This paper points out that the long-run structural reform is more important than the short-run Keynesian policy in Japan.     

中国循环农业发展评估——政策回顾与对辽中县的调研案例

循环农业涉及农业废弃物的循环性利用和资源保护等方面,在中国获得了越来越多的关注。当前对循环农业的政府干预手段较多,但目的和手段都不尽相同。因此,有必要对这些政策系统化,并进行深入了解,提出具体建议,以促进循环农业发展。研究总结中国有关循环农业发展的现行政策,揭示影响其发展的关键因素,选择辽宁省沈阳市辽中县为案例,通过比较分析循环农业和非循环农业的农业管理方式差异,揭示农民培训的重要性。研究结果表明,循环农业生产者使用农家肥的比例(38%)明显高于非循环农业生产者(6%),使用化肥的比例(90%)低于非循环农业生产者(98%)。每种作物的U-STAT和模式都显示循环农业生产者比非循环农业生产者使用更少的农家肥和化肥。循环农业生产者玉米的产量明显高于非循环农业生产者。许多循环农业生产者使用化肥,其数量与非循环农业生产者使用的并没有很大的区别。因此,为了推动循环农业发展,传授循环农业技术,开展具体技术培训和信息服务比简单的宣传更为重要。     

Performance of Japanese firms in patented inventions; an analysis of patents granted in the U.S.

This paper addresses the relation between firm size and R&D activity for Japanese large manufacturing firms using patents granted in the U.S.. Japanese firms loom larger in world R&D agenda; therefore, the examination of the determinants of their R&D activity, in particular, the effects of firm size, may provide a suggestion of R&D activity. The firm size-patent count relationship varies across industry. In many industries, Japanese experience is not in favor of the assertion that there is a return to scale in R&D among large firms, indicating that Schumpeterian entrepreneurship is not likely to take place more than proportinately to firm size. This conclusion is not inconsistent with Schumpeter's theory.     

ENDOGENIZING CONSUMPTION IN THE INPUT‐OUTPUT MODEL: THEORY AND APPLICATION

Since the basic model of input‐output analysis does not take into consideration the income effect on consumption expenditure, we constructed a model which endogenizes consumption and breaks down integrated production inducement into Leontief and Keynesian effects in a generalized context and in two solution approaches. Using short‐term marginal consumption propensities, we estimated that Keynesian effects make up about 14% of the integrated inducement effects for Japan. The public services sector, which is not influential in the basic model, becomes very influential in consideration of Keynesian effects. Manufacturing and service sector products are the main targets of the expanded consumption. The impact of a change in exogenous final demand can be easily simulated by applying the suggested apparent input coefficient matrix to the integrated inverse matrix.     

House Allocation with Transfers

We consider the Shapley–Scarf house allocation problem where monetary transfers are allowed. We characterize the class of mechanisms that are strategy-proof, ex post individually rational, ex post budget-balanced, and “collusion-proof.” In these mechanisms, the price of each object is fixed in advance, and the objects are reallocated according to the (unique) core assignment of the Shapley–Scarf economy associated with the prices. The special case in which all prices are zero is the core mechanism studied by Shapley and Scarf. Our mechanisms are compelling alternatives to the Groves mechanisms, which satisfy neither budget balance nor our condition of collusion-proofness. Journal of Economic Literature Classification Numbers: C71, C78, D71, D78, D89.     

Changing economic geography and vertical linkages in Japan

In Japan, the manufacturing has become geographically dispersed in the 1990s, when the import share has risen after the historic exchange rate appreciation. As is consistent with the interpretation that import penetration undermines regional input–output linkages, our regressions detect the significant decline of industrial concentrations previously established near output absorbers, especially in industries with high import share growths. This paper also finds that local knowledge spillovers and immobile specialized labor affect regional growth. Thus, while regional demand of tradable outputs matters less, regional supply of inputs, especially non-tradable inputs, remains critical for manufacturing locations. J. Japanese Int. Economies 17 (4) (2003) 561–581.     

Japanese government debt and sustainability of fiscal policy

We construct quarterly series of the revenues, expenditures, and debt outstanding for Japan from 1980 to 2010, and analyze the sustainability of the fiscal policy. We pursue three approaches to examine the sustainability. First, we calculate the minimum tax rate that stabilizes the debt to GDP ratio given the future government expenditures. Using 2010 as the base year, we find that the government revenue to GDP ratio must rise permanently to 40–47% (from the current 33%) to stabilize the debt to GDP ratio. Second, we estimate the response of the primary surplus when the debt to GDP ratio increases. We allow the relationship to fluctuate between two “regimes” using a Markov switching model. In both regimes, the primary surplus to GDP ratio fails to respond positively to debt, which suggests the process is explosive. Finally, we estimate a fiscal policy function and a monetary policy function with Markov switching. We find that the fiscal policy is “active” (the tax revenues do not rise when the debt increases) and the monetary policy is “passive” (the interest rate does not react to the inflation rate sufficiently) in both regimes. These results suggest that the current fiscal situation for the Japanese government is not sustainable.     

Import Competition and Employment in Japan: Plant Startup, Shutdown and Product Changes

This paper examines the relationship between import competition and employment during and after the recent Bubble period in Japan. Gross job flow data are combined with import data for 334 four-digit manufacturing industries. The estimates demonstrate that various modes of employment adjustment respond differently to changes in import prices. Job creation/destruction associated with plant startups/shutdowns was significantly sens-itive to import competition. Among plants continuously operating, job creation during the Bubble boom by plants that altered their product mix across industries was responsive to import price fluctuations, while job flows at plants that remained within the same industries were not.     

A supply chain-transport supernetwork equilibrium model with the behaviour of freight carriers

This paper presents a supernetwork equilibrium model integrating supply chain networks with a transport network, namely, a supply chain-transport supernetwork equilibrium model. The model takes into account the behaviour of freight carriers and transport network users to endogenously determine the transport costs generated in the supply chain networks. The interaction between transport network and supply chain networks can also be examined. Results of the numerical tests reveal that the improvement of transport network could enhance the efficiency of supply chain networks. The paper makes contributions to modelling of supply chain networks as well as to that of transport networks.     

Nonlinear pricing with self-control preferences

A basic assumption of economics is that consumers choose what they want. However, many consumers find it difficult to stop overeating, overspending, smoking, procrastinating, etc, even though they want to. In reality, consumers have temptation and it is psychologically costly to exercise self-control. To clarify the implications of the existence of temptation and self-control costs, this paper studies a firm's optimal selling strategy exploiting the behavioral features of consumers. We characterize optimal nonlinear pricing schemes for a monopoly when self-control is costly for consumers. Since consumers have a preference for commitment, the firm faces a trade-off between offering a small menu that makes the consumers’ self-control easier and offering a large menu that achieves better price discrimination. We show that the optimal menu resembles the one in the standard nonlinear pricing problem with a price ceiling, where the upper bound on prices is determined endogenously by a participation constraint. The ceiling motivates the firm to offer a relatively flat and compact price schedule, serving more consumers with low demand. The characterization also shows that the firm may earn less if consumers have temptation.