The sampling distributions of the predictor for an autoregressive model under misspecifications

Approximations to the sampling distributions of the predictor are given misspecifying the autoregressive moving average model as an autoregressive model. We deal with both conditional and unconditional distributions for the dependent and independent cases according to whether the sample data used in estimation and in prediction are dependent or not. The bias and mean squared error are easily obtained from these approximations.     

A note on the existence of monetary equilibria in overlapping generations models with storage

Wallace's result for an OG model with nonstochastic storage is extended, by provision of a necessary and sufficient condition for fiat currency to be valued in equilibrium in an OG model with stochastic storage. It is shown that a monetary equilibrium exists if and only if the real rate of return on currency that would obtain in the stationary monetary equilibrium exceeds the risk-free real rate of return that obtains in the nonmonetary equilibrium.     

Negotiated tariffs in free entry oligopoly under integrated markets

Using the Nash bargaining approach, this paper analyzes the negotiation of tariffs between two countries in free-entry oligopolies under integrated markets. Employing a symmetric model with linear demand and cost functions, the paper shows that for both countries Pareto-efficient negotiated tariffs are larger than the tariffs at the Nash equilibrium of a non-cooperative tariff game (tariff war) in which each country imposes its optimum tariff.     

USE OF NATIONAL ACCOUNTS FOR A SHORT-TERM ECONOMETRIC MODEL: 1954–1966

A quarterly macro-econometric model of Japan's postwar economy has been constructed for the period 1954–1965 FY on the basis of standardized quarterly national income accounts. The model is designed for facilitating short-term economic forecasting and formulating adequate fiscal and monetary policy. Longer-term factors such as labor mobility, technical progress, etc., were also considered in the model.
The model consists of fifty-three equations related to most of the macroeconomic variables in both money and real terms, and the equations were estimated in principle by the limited information maximum likelihood method. Principal exogenous variables related to policy instruments are government expenditures including transfers, parameters of tax functions, interest rate, and prices and fares controlled by the government, etc. In formulating the model, non-linear specifications were used whenever found necessary.
Results of our testing on its predictive capability indicated fairly satisfactory performances for our observation period and also for 1966 FY. Multipliers related to fiscal and monetary policy were also obtained, indicating the dynamic characteristics of the Japanese economy, in particular, represented by dynamic business fixed investment, as compared with corresponding multipliers of the U.S. models.
Although the model is exploratory and to serve as a core for a more disaggregated "Master Model," the usefulness of the model for our purposes and the workability of our quarterly national accounts data for model-building have been recognized. The quarterly data, however, still remain to be improved especially in regard to consistency between income and expenditure and integration with flow-of-funds accounts.     

Does policy reform promote FDI in developing economies? a firm-level simulation approach

How do policy reforms for foreign investors in developing economies affect inward foreign direct investment? Using a firm heterogeneity model calibrated to match data on Japanese multinational firms, we simulate how multinationals respond to a decline in investment procedure days. We find that such policy reforms in investment procedures significantly increase the aggregate entries and sales of multinational firms in developing economies, with the more pronounced impact at the extensive margin than at the intensive margin. At the firm level, declining entry costs encourage more productive firms to invest in a wider range of markets although such impacts are modest for the most productive firms that already penetrate many markets. The impacts on foreign sales per multinational firm are less clear-cut in magnitude across productivity levels in part because falling entry costs directly increase multinational entry to developing economies, but only indirectly encourage their existing production in these markets.     

Profitability of price and quantity strategies in a duopoly with vertical product differentiation

Using a model according to Mussa and Rosen (1978) and Bonanno and Haworth (1998) we consider a sub-game perfect equilibrium of a two-stage game in a duopolistic industry in which the products of the firms are vertically differentiated. In the industry, there are a high quality firm and a low quality firm. In the first stage of the game, the firms choose their strategic variables, price or quantity. In the second stage, they determine the levels of their strategic variables. We will show that, under an assumption about distribution of consumers' preference, we obtain the result that is similar to Singh and Vives (1984)' proposition (their Proposition 3) in the case of substitutes with nonlinear demand functions. That is, in the first stage of the game, a quantity strategy dominates a price strategy for both firms. Received: April 23, 1999; revised version: May 31, 2000     

Competition schemes and investment in network infrastructure under uncertainty

This paper compares two specific types of competition schemes—service-based and facility-based competition—by focusing on a firm’s incentive to invest in network infrastructure. We show that when monopoly rent is large, facility-based competition means that the initial introduction of infrastructure is made earlier than under service-based competition. However, when monopoly rent and the degree of uncertainty are both small, service-based competition brings about the earlier initial introduction of infrastructure than facility-based competition. The paper includes discussion of the policy implications of these findings.      

Structural reform of the electricity industry and economic growth

Using 782 panel data from 34 OECD countries from 1991 to 2013, this study aims to evaluate how structural reform affects GDP growth rate. We use the Barro-type GDP growth rate regression model and apply both fixed and random effect models. Eight structural reform variables are selected: (i) third party access, (ii) wholesale market dummy, (iii) choice of supplier, (iv) private ownership, (v) generation-others separation, (vi) transmission-others separation, (vii) distribution-others separation and (viii) overall vertical separation. Major finding results are as follows: (i) third party access can positively contribute to GDP growth rate, (ii) wholesale market and overall vertical separation might have a small negative effect, and (iii) other variables have no significant effect.     

Trait perceptions influence economic out-group bias: lab and field evidence from Vietnam

Group favoritism is typically directed toward in-group members and against out-group members, but these cross-group effects often vary. Little is known about why group effects on economic choices vary. We use a survey method developed in social psychology to measure stereotyped attitudes of one group toward another. These attitudes are then associated with prosociality in five experimental games (also using an unusual amount of individual-level sociodemographic control). We present evidence from an artificial field experiment of a majority group with high status (Vietnamese) exhibiting no disfavoritism toward a lower-status out-group (Khmer) and typical disfavoritism to a second out-group (Chinese). Both Vietnamese and Chinese groups see the Khmer as warm but incompetent, attitudes which seem to activate empathy rather than contempt. The results suggest that measuring between-group stereotype attitudes can be used to predict the sign of cross-group favoritism in other natural settings.     

Impact of training on the intensification of rice farming: evidence from rainfed areas in Tanzania

Agricultural development is indispensable for poverty reduction and food security in sub‐Saharan Africa (SSA). This study investigates the impact of rice production training in a modified version of the System of Rice Intensification (SRI) on the performance of small‐scale rice farmers in a rainfed area of Tanzania. Utilizing the plot level variation, we employ propensity score matching (PSM) to assess the impact of training on technology adoption, productivity, and profitability. We also estimate a difference‐in‐differences model with plot fixed effects using recall panel data covering the periods before and after training. We found that trainees achieved an average paddy yield of 4.7 tons per hectare and rice profit of 191.5 USD per hectare on the plots where new technologies were adopted, which is higher by about 1.3–1.8 tons and 119–137 USD per hectare than on the other plots. Our study suggests the high potential of transforming favorable rainfed rice growing areas in SSA so as to achieve a rice Green Revolution through training in modern input use and improved agronomic practices.