Time preference and two-country trade

We present a dynamic two-country model of international trade with endogenous time preference. We show that if the two countries have similar preferences, production technologies and labor endowments, there exists a unique and stable steady state such that both consumption and investment goods are produced in both countries. Unlike the case of constant time preferences, the steady state is independent of the initial international distribution of capital. We prove a dynamic Heckscher–Ohlin theorem such that the labor-abundant country exports the labor-intensive good.     

Transboundary Pollution in a Dynamic Game Model

We consider a dynamic game model in which N countries produce a single product that is not traded. Production results in emissions that accumulate a stock of pollution in each country. Households in each country derive utility from consuming the product but face costs depending on the level of the country-specific stock of pollution as well as the pollution stocks of the other countries. We distinguish three different cost scenarios. For all three, we show the existence of a Markov perfect equilibrium (MPE) and derive the collusive outcome. The MPEs are associated with the case where countries fail to coordinate their policies, while the collusive solutions correspond to the coordinated policy.
JEL Classification No.: C73.     

东芝资深黑带的五道辨析题

如何为资深黑带定位、如何发挥资深黑带人员的才能等种种问题。曾经困扰东芝公司，东芝公司做出了自己的回答。也许这回答，不适合被中国的六西格玛推进者们照搬和模仿．也不可能代替我们自己寻找标准答案的过程，但其中的基础原理和东芝问题分析的关键因素。仍然透着实践的真知和智慧。正如全国六西格玛管理推进工作委员会办公室主任岳刚在2007年7月14日第一期资深黑带高级研修班开幕式时说的，通过“体系学习＋实践”的培训．努力建成六西格玛领域的“黄埔军校”的过程中。“要在借鍪国外MBB培训的体系基础上．学习国外MBB的实际做法。”希望大家在参考东芝的答案后，在自己公司六西格玛推进的浩大工程中，少走弯路．少犯错误，交出一份令自己企业满意的六西格玛推进的答案。[编者按]     

Integrative diversification of wellness tourism services in rural areas – an operational framework model applied to east Hokkaido (Japan)

A framework model for wellness tourism development in rural areas is developed in this paper, combining the concepts of integrative diversification, tourism product development, and an endogenous approach to innovation dynamics. Three spatial levels of wellness services are considered (establishment, destination, and the region where they are located) in order to identify the required resources, services to develop, stakeholders to involve, and a process to match the supply and demand in wellness tourism. The paper concludes with an exploratory application to the case of east Hokkaido (Japan), identifying crucial challenges for a diversification of wellness services based on the traditional onsen practices.     

Response of Asset Prices to Monetary Policy under Abenomics

In this paper, I investigate the causes of the recent sharp response of the yen and Japanese stock prices to the discussion of, and the subsequent implementation of bold monetary easing by the Bank of Japan as demanded by Prime Minister Abe. I present statistical evidence that the response of the two asset prices have indeed been unusually large relative to the past experience with nonconventional monetary policy (NCM) even after allowance is given for the rise in global economic activity and asset prices. I also point out that the rally has been led by speculative trading by foreign investors, while domestic investors have largely stayed on the sidelines. I discuss possible reasons for such foreign investor behavior. Simply put, the unprecedented political pressure raised hopes of the adoption of bold measures by the Bank of Japan. I discuss, however, the possibility that the room for further action by the Bank is quite limited apart from what might be called a targeted helicopter drop of money. I also point out the possibility that investor behavior may have not been based on economic fundamentals. The asset price volatility since April 2013 is interpreted in the light of such discussions.     

Why Are Concavity Conditions Not Satisfied in the Cost Function? The Case of Japanese Manufacturing Firms during the Bubble Period*

This paper examines empirically the reasons why Japanese manufacturing firms frequently fail to satisfy concavity of the cost function in input prices. We focus on the ‘bubble period’ in the 1980s when land was in great demand and land prices soared. By estimating the translog cost function with land as one of production inputs, we find that violation of concavity mainly resulted from weak bank–firm relationship and massive transactions of land. We also demonstrate that elasticities of substitution between land and other inputs are estimated quite differently if the firms violating concavity are not excluded from the analysis.     

The role of newly emergent wholesalers in the food and drink industry in Japan,c.1880 to 1940: Focusing on the case of Kokubu

Abstract

This article explores the historical development of Japanese wholesalers in the food and drink industry in modern Japan. Despite many criticisms of Japanese wholesalers as being “multi-layered,” “old-fashioned,” and “outmoded,” there were historical reasons for the existence of wholesalers. While the traditional wholesalers remained even after the Meiji Restoration, the new wholesalers emerged by dealing with new products that appeared for the first time in modern Japan. Utilizing the historical conditions of both producers and retailers, the newcomers such as Kokubu boosted their development by innovative activities and gradually superseded the traditional wholesale market, firmly establishing their position as general wholesalers before the Second World War.     

FINANCIAL DISTRESS AND INDUSTRY STRUCTURE: AN INTER-INDUSTRY APPROACH TO THE LOST DECADE IN JAPAN

This paper proposes a novel approach to investigating the propagation mechanism of balance sheet deterioration in financial institutions and firms, by extending the input–output analysis. First, we use a unique input–output table augmented by firm size dimension. Second, we link the input–output table with the balance sheet conditions of financial institutions and firms. Based on Japanese input–output tables, we find that the lending attitude of financial institutions affected firms’ input decision in the late 1990s and the early 2000s. Simulation exercises are conducted to evaluate the effects of changes in the lending attitude toward small firms as favorable as that toward large firms on sectoral allocations. We find that output was increased for small firms and reduced for large firms. The change in output was non-negligible, about 5.5% of the initial output of each sector. In particular, it exceeded 20% in textile, iron and steel and fabricated metal products.