Logit and multinomial logit models for discrete-time event-history analysis: a causal analysis of interdependent discretestate processes

This paper introduces a new direction of methodological elaborations in event-history analysis based on discrete-time logit and multinomial logit models. The methodological elaborations address (1) simultaneous analysis of two-way transitions between two states, and (2) its extension for a causal analysis of two interdependent two-state processes. The former elaboration permits a more parsimonious and unambiguous expression for the effects of covariates on the dependent process than can be obtained by separate analyses of each direction of transition. The latter elaboration provides an extension for a log-linear causal analysis of 16-fold tables presenting two-wave-two-variable panel data, and relates the log-linear analysis to event-history analysis. An illustrative application, focusing on the dynamic relationship between premarital cohabitation and marijuana use, demonstrates the usefulness of the new models and methods.     

Activity of a 'Soft Science Group' in Mitsubishi Electric Corp.

‘Soft Science’ is defined by the Science and Technology Agency of the Japanese Government as a new methodology to forecast, plan. control and evaluate. This paper describes the activities of the Soft Science Group (SSG) which has been established in the Mitsubishi Electric Corporation. SSG presently consists of 13 members and has issued in excess of 300 reports in 5 years. Its basic activities are concerned with setting new research themes, information exchange meetings, and work on specific projects involving also engineers seconded from operating divisions. The paper summarizes these activities and presents a case example of planning a new product which has already been developed and commercialized.     

Interior Optimal Chaos with Arbitrarily Low Discount Rates

In this study, we demonstrate, for an arbitrarily small discount rate, the existence of a topologically chaotic policy function that lies in the interior of the technology set in a two-sector model with smooth production and utility functions. For this purpose, we adopt CES production functions and a utility function with a constant elasticity of intertemporal substitution. The two-sector model with those functions always has a policy function lying in the interior of the technology set (interior policy function). The existence of a scramble set of a policy function may be proved even in the case in which the discount rate is arbitrarily small.
JEL Classification Number: 041.     

Non‐linear Dynamics in the Infinite Time Horizon Model

Using results from the theory of non‐linear dynamical systems, it has been shown that optimal growth theory can provide new explanations for business cycles and for international differences in growth and development. The present survey concentrates on this aspect of optimal growth theory, that is on the possibility of fluctuations and non‐uniqueness in models of optimal capital accumulation. It is a selective survey on non‐linear dynamics in infinite time horizon models of optimal growth.     

Homoclinic bifurcation and global indeterminacy of equilibrium in a two-sector endogenous growth model

This paper considers an endogenous growth model that belongs to the same family as the Lucas model. In the Lucas model an external effect appears in the physical-goods sector, whereas in our model, it appears in the educational sector. In our model, this external effect yields multiple balanced growth paths. Our model undergoes a homoclinic bifurcation and exhibits global indeterminacy of equilibrium.     

Intersectoral Externalities and Indeterminacy

We consider a two-sector economy with positive intersectoral external effects and nonincreasing social returns. We show that if the discount factor ρ is close to 1 then local indeterminacy may be obtained with mild market imperfections. Moreover, with additional conditions, when ρ is made smaller the steady state becomes totally unstable and quasi-periodic cycles, along which equilibrium paths are indeterminate, may appear through a Hopf bifurcation. This will be proved even if the investment good is capital intensive at the private level while this condition guarantees local determinacy in the sector specific case. Journal of Economic Literature Classification Numbers: C62, E32, O41.     

Equilibrium Growth and Nonlinear Dynamics in Continuous-Time Models

Building on recent work on equilibrium growth models with externality, I re-examine earlier results from multi-sector growth models in the continuous-time framework, and study the structural relationship between technology and local dynamics. It is shown that it is very easy to construct large classes of economies that exhibit Hopf bifurcations or indeterminacy with constant returns to scale in multi-sector frameworks.
JEL Classification Numbers: C41, E32, O41.     

Are Japanese stock prices too high?

This paper studies the behavior of Japanese stock prices, especially that of the price earnings ratio (PER) and the price dividend ratio (PDR) in the 1980s. It finds that movements in fundamentals such as the interest rate and the growth rate together with the widespread practice of cross share holdings between corporations fail to explain the behavior of PER and PDR in the 1980s. The sharp increases in the Japanese PER and PDR in the 1980s are due to one of the following three causes: bubbles, declines in risk premium, and expectations of land price inflation. The paper argues that the latter two may have been important features of the Japanese economy in the 1980s.