Successes and dangers of Japanese foreign trade strategy

Japan's high and increasing trade and current account surpluses have aroused in the other industrialized nations a growing fear of Far Eastern competition. Some countries consider that protectionist measures are the only suitable response to increasing imports from Japan. Japan's “unfair” conduct of its foreign trade is often cited as a reason for such a reaction. Is this reproach justified? What can be done to avert the dangers to both Japan's foreign trade and the world economy caused by this situation?     

Splitting Leagues

Splitting leagues or tournaments is puzzling when agents are homogeneous and splitting leads to a negative competition effect. However, a principal can benefit from splitting under some circumstances. First, splitting can be used as a divide-and-rule strategy by the principal to create additional incentives when collusion among the agents is possible. Second, splitting leagues gives the principal the opportunity to introduce promotions and relegations between nested tournaments.     

Dynamic trading under integer constraints

In this paper, we investigate discrete-time trading under integer constraints, that is, we assume that the offered goods or shares are traded in integer quantities instead of the usual real quantity assumption. For finite probability spaces and rational asset prices, this has little effect on the core of the theory of no-arbitrage pricing. For price processes not restricted to the rational numbers, a novel theory of integer-arbitrage-free pricing and hedging emerges. We establish an FTAP, involving a set of absolutely continuous martingale measures satisfying an additional property. The set of prices of a contingent claim is not necessarily an interval, but is either empty or dense in an interval. We also discuss superhedging with integer-valued portfolios.     

Taxation and Capital Structure Choice: The Role of Ownership

Applying firm fixed‐effects estimations to European firm‐level data, I analyze how ownership structure affects the relationship between taxation and capital structure. I find that an increase in the corporate tax rate affects the debt‐to‐assets ratio positively, and that this effect is stronger for firms with concentrated ownership. These results hold independently of whether firms are standalone or subsidiaries, and are also valid if subsidiaries are divided into those that are foreign‐owned and those domestically owned. Lastly, ownership plays a role even when controlling for other potentially important determinants of the relation between corporate taxation and capital structure.     

Cities in Contemporary Capitalism

This article outlines essential concepts of the political economy approach of urban research and offers critical modifications and clarifications to some of its contentions concerning the functioning of cities as ‘strategic places’ of capital accumulation. The interrelations between contemporary capitalism and urban economic development are discussed at the scale of a transnationally extended urban system. Based on the general context of the global economic downturn, I focus on the role of cities in distinct circuits of capital, the switching of capital flows within the urban system and the different functional roles of cities within the world city network that interconnects cities both in the global North and South. I call into question the established focus of urban economic research on the role of cities as financial and service centres, arguing that cities might redirect their economic development trajectories towards ‘real economy’ activities, in contrast to relying on the disastrous development model of finance‐dominated capitalism.     

Long-run sectoral development: Time-series evidence for the German economy

In economic development, long-run structural change among the three main sectors of an economy follows a typical pattern with the primary sector (agriculture, mining) first dominating, followed by the secondary sector (manufacturing) and finally by the tertiary sector (services) in terms of employment and value added. We reconsider the verbal theoretical work of Fourastié and build a simple model encompassing its main features, most notably the macroeconomic influences on the sectoral development. Estimation and analysis with German data for the period 1850–2001 show that this model is quite capable of replicating the empirical facts.