The long-term impacts of orphanhood on education attainment and land inheritance among adults in rural Kenya

Although the long-term economic impacts of the AIDS epidemic on orphans have been major concerns, few studies have investigated the impacts of orphan status into adulthood. Therefore, this article examines the education attainment and land inheritance of former orphans, who have lost at least one parent before reaching the age of 15 years, by using household surveys in Kenya. We find about a one-year lower educational attainment among former maternal orphans compared with former nonorphans among adults who started schooling before the Free Primary Education program introduced in 1974 but not among adults who started schooling after 1974. On inherited land, we find no significant difference between households headed by former orphans and nonorphans, after controlling for land owned by parents, numbers of brothers and sisters, and birth order among brothers.     

AMU Deviation Indicators for Coordinated Exchange Rate Policies in East Asia and their Relationships with Effective Exchange Rates

After the Asian currency crisis in 1997, the monetary authorities of East Asian countries have been strengthening their regional monetary cooperation. In this paper, we propose a deviation measurement for coordinated exchange rate policies in East Asia to enhance the monetary authorities’ surveillance process for their regional monetary cooperation. We calculate an Asian Monetary Unit (AMU) as a weighted average of East Asian currencies following the method used to calculate the European Currency Unit (ECU). Also, we calculate AMU Deviation Indicators which show how much each of the East Asian currencies deviates from a hypothetical benchmark rate in terms of the AMU. Furthermore, we investigate relationships between the AMU Deviation Indicators and the effective exchange rates, which mean international price competitiveness in terms of international trade. We found strong relationships between the AMU Deviation Indicators and the effective exchange rates except for some currencies. The results suggest that monitoring the AMU Deviation Indicator will be useful for the monetary authorities’ surveillance in East Asia in order to stabilise their effective exchange rate or price competitiveness among the East Asian countries.     

Pricing Structure in Tokyo Metropolitan Land Markets and its Structural Changes: Pre-bubble,Bubble, and Post-bubble Periods

In this paper, we estimate hedonic price equations of Japanese commercial and residential land prices for a 25-year period and to investigate possible structural changes in these price equations. Our price equations are based on transaction prices, not appraised land values, of commercial land in Central Business Districts of Tokyo (Chiyoda Ward, Chuo Ward, and Minato Ward), and residential land of its suburb (Setagaya Ward). We find that price structure differs substantially among locations, reflecting differences in supplier pricing and end-user preferences. We also find significant structural changes in price structure, identifying pre-bubble, bubble and post-bubble periods.

Indonesia After the Asian Crisis*

Indonesia was deeply affected by the 1997–1998 crisis, more so than its East Asian neighbors. Its economic contraction was deeper and more prolonged. It was the only one to experience a (temporary) loss of macroeconomic control. It also suffered “twin crises,” in the sense that its serious economic and financial problems were accompanied by regime collapse. Consequently, recovery was a slow and complex process, as new institutions had to be created, and old ones reformed under successive short‐lived administrations. But this process is largely over. The directly elected president with a strong popular mandate is in power. The new institutional framework for economic policy‐making is in place. Macroeconomic stability has been restored. Although growth has yet to return to pre‐crisis levels, by 2004 per capita income and poverty incidence had recovered to levels prevailing in the mid‐1990s, and in the circumstances economic recovery has arguably proceeded about as quickly as could reasonably have been expected.     

A nonsmooth, nonconvex model of optimal growth

This paper analyzes the nature of economic dynamics in a one-sector optimal growth model in which the technology is generally nonconvex, nondifferentiable, and discontinuous. The model also allows for irreversible investment and unbounded growth. We develop various tools to overcome the technical difficulties posed by the generality of the model. We provide sufficient conditions for optimal paths to be bounded, to converge to zero, to be bounded away from zero, and to grow unboundedly. We also show that under certain conditions, if the discount factor is close to 1, any optimal path from a given initial capital stock converges to a small neighborhood of the golden rule capital stock, at which sustainable consumption is maximized. If it is maximized at infinity, then as the discount factor approaches 1, any optimal path either grows unboundedly or converges to an arbitrarily large capital stock.     

Ability transmission,endogenous fertility and educational subsidy

In this study, we attempt to investigate how educational subsidy, childcare allowance and family allowance affect economic growth and income distribution on the basis of simulation models which incorporate intergenerational ability transmission and endogenous fertility. The simulation results show that financial support for higher education can both increase economic growth and reduce income inequality, especially if the abilities of parent and child are closely correlated. In contrast with educational subsidy, raising childcare allowance or family allowance has limited impacts on growth and income inequality.     

Out‐of‐Sample Exchange Rate Forecasting and Macroeconomic Fundamentals: The Case of Japan

This study explores the respective out‐of‐sample exchange rate forecasting abilities of five macroeconomic fundamental models in comparison to a naïve random walk model for Japan during the post‐Bretton Woods era. To assess the influence of major economic changes, we estimate both linear and nonlinear models for all the macroeconomic fundamentals. Overall, most structural exchange rate models outperform a naïve random walk model in terms of forecasting accuracy in the short horizon. When the fundamentals are only linearly modelled, the forecasting ability of the Taylor rule is generally superior to other fundamental models. When the fundamentals are nonlinearly specified, the predictability of some other models rises dramatically to match that of the Taylor rule models in short and/or long horizons. Of importance, we determine that the yen/dollar exchange rate forecasting performance effectively improves in several fundamental models when influential economic changes are incorporated.     

Monopolistically competitive equilibria with differentiated commodities

Summary. An existence theorem of monopolistically competitive equilibrium of the economy in which commodities are subject to differentiation will be proved. We start with the existence theorem of Negishi (1961) and extend it to the commodity space of measures on a compact metric space. In so doing, we have to handle the price normalization carefully. Received: December 2, 1996; revised version: May 6, 1999     

A spatio-temporal model of house prices in the USA

This paper provides an empirical analysis of changes in real house prices in the USA using State level data. It examines the extent to which real house prices at the State level are driven by fundamentals such as real per capita disposable income, as well as by common shocks, and determines the speed of adjustment of real house prices to macroeconomic and local disturbances. We take explicit account of both cross-sectional dependence and heterogeneity. This allows us to find a cointegrating relationship between real house prices and real per capita incomes with coefficients (1,−1)$(1,-1)$, as predicted by the theory. We are also able to identify a significant negative effect for a net borrowing cost variable, and a significant positive effect for the State level population growth on changes in real house prices. Using this model we then examine the role of spatial factors, in particular, the effect of contiguous states by use of a weighting matrix. We are able to identify a significant spatial effect, even after controlling for State specific real incomes, and allowing for a number of unobserved common factors. We do, however, find evidence of departures from long run equilibrium in the housing markets in a number of States notably California, New York, Massachusetts, and to a lesser extent Connecticut, Rhode Island, Oregon and Washington State.