Economic studies of taxation in Japan: The case of personal income taxes

We argue that tax policy in Japan is on a shaky empirical ground. First, until recently, no serious attempts had been made to estimate labour responses to taxation, especially with respect to prime-age male workers. Second, while there is some stock of empirical analysis on labour supply response of female workers, few studies have appropriately allowed for the budget constraint structure implied by the tax system. Third, as a corollary, there is not a reliable stock of empirical estimates to quantify the frequently employed concepts of “disincentives to work” or “distortion.” Given this state of the literature, we introduce our estimates, and calculate the degree of distortion using the concept of the marginal cost of public funds.     

Risk-sensitive Portfolio Optimization with Two-factor Having a Memory Effect

Risk-sensitive portfolio optimization problems are studied with a specific setting: a market model with a two-dimensional linear-factor is considered, where the factor consisits of an Ornshtein-Uhlenbeck process and its historic weighted-average. A sharp solvability condition is obtained in risk-seeking case. Further, an application of CPPI technique is mentioned to treat a problem with floor-constraint.     

A Quick Method for Assessing Economic Damage Caused by Natural Disasters: An Epidemiological Approach

In the aftermath of any natural disaster, a quick assessment of economic damage is called for, without which recovery planning and fiscal budgeting is impossible. What is customarily done as damage accounting is to use some aggregation by parts method, which is predisposed to commit double counting, omission, and bureaucratic inconsistencies. As an alternative, we propose to work with a social epidemiological model. First, we present a result by means of a log linear model which shows evidence of hazard factors and vulnerability factors at work. We then simplify the model by deleting the variables that are not significant in a linear formulation. Lastly, we give our estimate of economic damage for the case of the North East Japan Earthquake and Tsunami of March 11, 2011 and alert that the true damage may well be the double of government??s estimate.     

Increasing marginal costs and satiation in the private provision of public goods: group size and optimality revisited

It is widely recognized that the degree of inefficiency in the voluntary provision of a public good increases with the group size of an economy. However, we find that only a slight modification in the conventional assumptions gives rise to a profound difference in outcome. In particular, we show that there is a case where the Nash equilibrium provision and the efficient provision will converge as the size of an economy grows. To show this, we assume individuals face increasing marginal cost of voluntary provision and their preference function has a finite satiety point.      

Is it Abenomics or Post-Disaster Recovery? A Counterfactual Analysis

This study is an attempt to assess the impact of policy initiatives launched by Japan’s new Prime Minister Shinzo Abe on Japan’s real gross domestic product (GDP) in his first quarter in office. We use as a benchmark for measurement a counterfactual estimate of GDP. Since the Japanese economy is also in the midst of reconstruction from the 2011 Tohoku disaster in the first quarter of 2013, we first estimate the counterfactual GDP that would have materialized in the absence of that disaster. We will use a dummy variable method and the statistical method proposed by Cheng Hsiao and others. We check the validity of these methods with regard to the Kobe earthquake of 1995 and then estimate the post-disaster counterfactual GDP in the absence of the Tohoku disaster. We measure the impact of government policies as the difference between the actual and counterfactual GDP. By doing so, we conclude that government policies have failed to lift Japan’s GDP to the expected level. Even with the help of Abenomics, the gap remains in the range of 6 to 14 trillion yen per year.     

A Generalization of Continuity and Convexity Conditions for Correspondences in Economic Equilibrium Theory

Fixed-point theorems for multi-valued mappings and economic equilibrium existence theorems are generalized from the viewpoint that the continuity and/or convexity assumptions on a mapping may be replaced by weaker local conditions on the vector field defined by the mapping. The generalization gives us natural conditions on individual (possibly non-ordered) preferences or aggregated demand behaviours so that we may obtain several extensions of recent results in social and game-theoretic equilibrium theories.
JEL Classification Numbers: C60, C62, C72, D50, D51.     

Country size and the voluntary provision of international public goods

Standard studies on voluntary contributions to an international public good treat national economies as if they were single agents. This masks the fact that nations are comprised of populations of citizens, whose collective benefits a national government takes account of when deciding on the amount of the contributions. This paper constructs a model which explicitly allows for the effect of population differences and explores their consequences. We can then present the so-called exploitation of the great by the small by Olson and Zeckhauser [Olson, M., Zeckhauser, R., 1966. An economic theory of alliances. Review of Economics and Statistics 48 (1966) 266–279] and explore how residents of larger countries fare relative to those in smaller countries. We also elaborate on the effects of changing populations and show that growing into a large country is not necessarily beneficial for the country's residents.