Inequality in Japan*

This paper analyzes income inequality, based on government income statistics and an attitude survey. First, the paper describes the present income inequality in Japan by using Gini coefficients, the income share of the top and bottom income classes, and mobilities among income classes. Second, by using the Japan–USA international survey, this paper analyzes the cause of the increasing awareness that Japan's income gap is widening. In these two countries, their distinct value judgments about the causes for the gap influence how they perceive it. The Japanese have negative perceptions about the income gap because they perceive it to be influenced by talent, academic background, or luck, and this perception seems relatively uncommon in the USA. A large percentage of Japanese also think one's income is decided by talent, academic background, or luck, although it should not be. Such disagreements between the desired and perceived determinants of income are thought to raise their negative perception of the gap.     

Product competitiveness evaluation— quantitative analysis for development strategy

Product competitiveness is the most important concern for industry and is decided by the interaction of engineering activity with the market environment. This paper describes the characteristics of technological product competitiveness in the market, by use of an ordinal scaling method based on rivalry comparison. The analysis was made for actual data extracted from data on consumer electrical products evaluated over a long period of time. Four methods were examined to quantify ordinal data for competitive evaluation elements. The maximum correlation ratio method was proved to be most reasonable for extracting detailed characteristics regarding product competitiveness in the market. It was also confirmed how the highest and lowest rankings in some element influence total competitiveness. The most competitive product in the electrical consumer market gets the highest ranking in performance evaluation, first or second ranking in timing, and above average ranking in cost, with no major setback in reliability.     

Major categories of changes in food consumption patterns in Japan 1963–91

Abstract

The purpose of this paper is to categorize the major trends in Japanese food consumption patterns, and evaluate quantitatively the relative significance of each category in the period 1963–1991. Detailed examination of changes in per capita consumption of more than 100 individual food items for five sub‐periods led to the identification of four major categories or trends: quality, convenience, diversification, and health.

About 80% of cases fall under one of those four categories. In the first sub‐period, the trend towards foods of higher quality was the most important category, accounting for about 40% of all cases. Later, however, it gradually lost its relative significance. The lost share was taken over by diversification and the trend towards healthy foods. The trend towards more convenient types of food invariably accounted for about one‐third of all examined cases.

The analysis of the factors which induced these categories of changes led to the conclusion that incomes and prices decreased their influence over the food consumption patterns while sociological factors increased their significance.     

Dynamic gains from international capital movements

The purpose of this note is to show that international capital movements cause an upward shift of the whole path of national income growth by extending the results of Amano (1965) and Gale (1974).     

Peril of the Inflation Exit Condition

Recent empirical evidence on monetary policy in Japan suggests that exits from the zero‐interest‐rate policy triggered by policy shocks can be expansionary. This paper provides theoretical examples of such expansionary policy‐induced exits. The examples suggest that the exit condition (the Bank of Japan’s stated commitment of not exiting from the zero‐rate regime unless the inflation rate rises above a certain threshold) may have made it difficult for the economy to escape from the liquidity trap.     

Integrating business modeling and roadmapping methods - The Innovation Support Technology (IST) approach

The purpose of this paper is to report the integration studies of business modeling and roadmapping methods for the “Innovation Support Technology (IST)” and the IST's practical application to real-world cases. The IST is conducted for the purpose of offering a convenient tool for engineers and researchers in order to enhance corporate value from R&D outputs. “Japan's lost decade” has forced companies to change R&D management and R&D operation style, especially regional industries. We propose the framework for revitalization of regional industries by using the Strategic Technology Roadmap made by the Ministry of Economy, Trade and Industry (METI-TRM) with business modeling. We applied this IST method to several real-world cases to show its effectiveness. This study represents the result of over four years (fall 2002) of work with the value creation framework of the business modeling method for R&D outputs, done by a group of researchers from JATES (Japan Techno-Economics Society).     

ASKING ABOUT CHANGES IN HAPPINESS IN A DAILY WEB SURVEY AND ITS IMPLICATION FOR THE EASTERLIN PARADOX*

This paper investigates whether the level of happiness and integrated process of changes in happiness are the same. Using the daily data of two waves of 4 and 6 months each, we found that the level of happiness is stationary, whereas the integrated process of changes is non‐stationary with a rising trend, implying that they are different series. An examination of the causes of the difference indicated that although adaptation completely influences the level of happiness, it only partially influences the change in happiness. This may be because the latter is based on a comparison between today and yesterday.     

Can IT be Japan's savior?

This paper constructs a multi-sector model to take explicit account of the very sharp change in the relative price between non-IT and IT goods. The model is calibrated to the Japanese economy, and its solution path from 1990 on is compared to Japan's macroeconomic performance in the 1990s. Compared to the one-sector analysis of Japan in the 1990s [Hayashi, F., Prescott, E.C., 2002. The 1990s in Japan: A lost decade. Rev. Econ. Dynam. 5, 206–235], our model does slightly better or just as well in accounting for Japan's output slump and does worse in accounting for the capital–output ratio. We also show that, to revive a 2% long-term growth in per capita GDP, Japan needs to direct 10% of private total hours to the IT sector. J. Japanese Int. Economies 19 (4) (2005) 543–567.     

Identifying a Liquidity Effect in the Japanese Interbank Market

This article examines whether there was a liquidity effect in the Japanese interbank market for reserves during the period from January 4, 1996, to February 12, 1999. According to the standard martingale model, the only determinant of the overnight rate during the reserve maintenance period is the rate that is expected to prevail on the settlement day (the last day of the period), but this model ignores the fact that reserves are used for interbank payments. If overdraft costs are introduced into banks' reserve management problem, the overnight rate will also depend on what this paper calls the reserve surplus, which captures the liquidity effect of reserves. We identify the liquidity effect by exploiting two institutional features. First, the overnight rates observed in the morning are forward rates for a contract to be settled later in the day. Second, changes in reserves that are due to factors other than open market operations are rendered temporary through defensive operations by the Open Market Desk. We show that the liquidity effect can be identified from the regression of the spot-forward differential on these temporary liquidity shocks. Our estimates indicate that there was a liquidity effect, at least before the Yamaichi debacle of November 1997.     

Industrialization and Expectations in a Small Open Economy

The degree of industrialization in a country can be measured by the diversity of intermediate goods produced in the country. I construct a small-country model in which this diversity is determined endogenously in the process of industrialization. My model shows that the character istics of equilibria depend on the substitutability among intermediate goods; particularly when the substitutability is large, there may be multiple equilibria. When such equilibria exist, optimistic expectations lead to a high degree of industrialization but pessimistic expectations yield a low degree of industrialization.
JEL Classification Numbers: O14, F43, F12