ECONOMIC GROWTH AND PUBLIC EXPENDITURE COMPOSITION: OPTIMAL ADJUSTMENT USING THE GRADIENT METHOD

Previous studies have looked at how the components of fiscal spending affect economic growth. However, we explicitly enquire into how to adjust the components in order to achieve the highest rate of economic growth starting from the present shares of components, by introducing a gradient method. The resulting optimal adjustment shares are proportional to the deviations from the average over elements of a gradient vector. The optimal adjustment share is completely estimated by using linear regression with any choice of omitted variable. The paper also provides an illustrative example taken from the annual panel data for the Japanese prefectural governments.     

Endogenous Cycles in Collateralized Credit

This paper presents a simple and tractable equilibrium model, where collateralized credit emerges under limited commitment. We show that even if there is no time variation in fundamentals, credit trade can fluctuate endogenously over time. In our theory, credit fragilities are associated with endogenous fluctuations in trade probabilities, collateral values, and lending volumes.     

(S,s) inventory dynamics and self-organized criticality

This paper proposes a new model of self-organized criticality in order to explain large fluctuations of aggregate production in an (S,s) economy. It is shown that the inventory distribution in an (S,s) economy always converges to a unique steady state, and that aggregate production exhibits a peculiar instability at the steady state: the propagation effect of a demand shock on aggregate production follows a power law.The model differs from previous models of self-organized criticality in that it incorporates a global interaction in the network. The global interaction is interpreted as a representation of market transactions with which economists are familiar. The other novelty of the paper is that an intrinsic instability of (S,s) economies is found. Many small non-linearities in the (S,s) economy may not be cancelled out in aggregation. Instead, they play a key role in organizing the fluctuations of aggregate production.     

IPv6:我们能做些什么?

日本:IPv6发展步入新阶段最近美国一份标题为“IPv6:为商业开放?关于IPv6技术定位和在企业部门部署的评述”的白皮书譬告说,大多数企业在考虑IPv6方面都滞后了,并作出这样的结论:企业必须马上制订计划配置IPv6性能的基础设施。然而单纯的     

EARTHQUAKE RISKS AND LAND PRICES: EVIDENCE FROM THE TOKYO METROPOLITAN AREA*

The current paper empirically addresses risk aversion of households and firms toward earthquake risks using a hazard map compiled for the entire region by the Tokyo metropolitan government in 1998. It finds strong evidence for the impact of earthquake risks on land pricing; land prices have been substantially lower in risky areas than in safe areas. That impact became more evident in the 1990s than in the 1980s, indicating that households and firms were becoming more sensitive to earthquake risks. In addition, this paper carefully examines the consistency of the estimated magnitude of earthquake risk premiums within a framework of the expected utility hypothesis.     

SHORT-RUN TRADE SURPLUS CREATION IN A TWO-SECTOR SETTING

This study investigates the effect of the suppression of competition in the domestic non-tradable sector on a country's trade balance in a small open economy. Using a two-sector model, this study demonstrates that the effect on the trade balance of such a suppression depends on the sector on which the policy is imposed. This result sharply contrasts with Yano's result in a one-sector model demonstrating that such a policy unambiguously creates a trade surplus in the short run.     

WHAT CAUSED FIXED INVESTMENT TO STAGNATE DURING THE 1990S IN JAPAN? EVIDENCE FROM PANEL DATA OF LISTED COMPANIES*

Taking into account considerable changes in the corporate finance behaviour of listed Japanese companies during the 1990s, this paper empirically investigates the causes of the stagnation of the listed companies’ fixed investment during the 1990s, using panel data from the companies’ financial statements. Our findings include the following: (i) while positive cash flow sensitivity was detected for the companies listed during the 1990s, it was not necessarily a consequence of the binding of liquidity constraints; (ii) declines in Tobin's q explain decreases in fixed investment throughout the 1990s; and (iii) the holding of liquid assets acted as a buffer against liquidity shocks.     

Reverse Mortgage Loans: A Quantitative Analysis

Reverse mortgage loans (RMLs) allow older homeowners to borrow against housing wealth without moving. Despite rapid growth in this market, only 1.9% of eligible homeowners had RMLs in 2013. In this paper, we analyze reverse mortgages in a calibrated life‐cycle model of retirement. The average welfare gain from RMLs is $252 per homeowner, and $1,770 per RML borrower. Bequest motives, uncertainty about health and expenses, and loan costs account for low demand. According to the model, the Great Recession's impact differs across age, income, and wealth distributions, with a threefold increase in RML demand for lowest income and oldest households.