Spatial patterns of residential development

A simple dynamic model of residential development with durable housing, where all households are identical and all developers have perfect foresight, is studied. It is shown that, unlike the case of static models, it is quite possible that house size decreases, and thus population density increases, with distance from the city center and that the house rent curve has positive gradient in certain area.     

Economics of Agglomeration

We address the fundamental question arising in geographical economics: why do economic activities agglomerate in a small number of places? The main reasons for the formation of economic clusters involving firms and/or households are analyzed: (i) externalities under perfect competition; (ii) increasing returns under monopolistic competition; and (iii) spatial competition under strategic interaction. We review what has been accomplished in these three domains and identify a few general principles governing the organization of economic space. A few alternative, new approaches are also proposed.J. Japan. Int. Econ.,December 1996,10(4), pp. 339–378. Kyoto University and University of Pennsylvania; and CORE, Université Catholique de Louvain and CERAS–ENPC (URA 2036, CNRS).     

Local Agglomeration and Global Networks Of the Semiconductor Industry: a Comparative Study of U.S. and Japanese Firms

The objective of this study is to examine the spatial organization of the U.S. and Japanese firms in the semiconductor industry. Our analyses give special consideration to the nature of the activities undertaken in the semiconductor production processes, the nature of the firm organization, the nature of the firm ownership, and the geographical area of analysis. Our approach is essentially diagrammatic in order to incorporate all the above factors. Therefore, unlike past studies, our study places special emphasis on tracing the connections between the whole spatial chain of production activities. The result is that different stages within the semiconductor production process have different geographical features, and that even the same vertically integrated sectors in the semi-conductor industry that differ by Japanese or U.S. ownership have quite different geo-graphical organizations.     

Dynamics of knowledge creation and transfer: The two person case

This paper presents a micro-model of knowledge creation and transfer for a couple. Heterogeneity of people in their state of knowledge is essential for successful cooperation in the joint creation of new ideas. However, the very process of cooperative knowledge creation affects the heterogeneity of people through the accumulation of knowledge in common. The model features myopic agents in a pure externality model of interaction. The equilibrium process tends to result in the accumulation of too much knowledge in common compared to the most productive state. Equilibrium paths are found analytically, and they are a discontinuous function of initial heterogeneity.     

External adjustments and coordinated exchange rate policy in Asia

In this paper, we estimate structural VAR models with contemporaneous restrictions based on neo-classical and Keynesian theories to investigate whether the cause of current account surpluses for East Asian economies is a “saving glut” or undervalued currencies. Analytical results show that the major determinant of the current account is the real effective exchange rate for all East Asian countries with the exception of China for which the major determinant is domestic GDP. Accordingly, the recently requested revaluation of the Chinese yuan may not be an effective policy for reducing the Chinese current account surplus, and may affect other Asian current accounts. We also investigate whether a Chinese currency revaluation would contribute to the improvement of current account imbalances in East Asia and find that a revaluation would, indeed, improve the current accounts of Japan, Korea, Indonesia, and Thailand. Since the trade structures of major East Asian countries are substitutes with that of China, a Chinese currency revaluation might not lead to a decrease in East Asian current account surpluses. Coordination of currency policy among East Asian countries is, therefore, needed to solve the global current account imbalance.     

Edokko Options: A New Framework of Barrier Options

In this paper, we will give a new framework of barrier options to generalize`Parisian Option' and `Delayed Barrier Option'. Take a stopping time asthe caution time. When occurs, derivatives are given `Caution'. After, if K.O. time =() occurs, derivative contractsvanish. We simply say that first `Caution' second `K.O.'. Using thisframework, designs of barrier options become more flexible than before and newrisk management will be possible. New barrier options in this category arecalled Edokko Options or Tokyo Options.     

Book reviews

Harloe, Michael The people's home? Social rented housing in Europe & America Hitz, Keil, Lehrer, Ronneberger, Schmid and Wolff (eds.) Capitales Fatales: Urbanisierung und Politik in den Finanzmetropolen Frankfurt und Zürich Ascher, François (ed.) Le logement en questions Shapira, Philip, Ian Masser and David W. Edgington (eds.) Planning for cities and regions in Japan     

Spatial patterns of urban growth: Optimum and market

The optimum spatial pattern of urban growth for a problem which is essentially a dynamic version of von Thünen model of land use is first studied by using a notion of bid land price curves, which is a dynamic extension of bid rent curves by Alonso [1]. Then a competitive market of which equilibrium growth path coincides with this optimum one is obtained by examining demand side properties. It is hoped in this way to throw some light for the future development of dynamic theory of urban land use.     

Comparing Economic Interdependence and the Structure of Industry in the ASEAN-4: an International Input-Output Approach

Structural adjustment policies have been adopted in the ASEAN-4 countries. The policy changes were intended to shift manufacturing from import substitution to export promotion. We assess how successful this was using the Asian International Input-Output Tables for 1975 and 1985. The success of structural adjustment is verified, as the number of export-led industrial sectors increased in each of the ASEAN-4 countries. The 1-0 tables are used to evaluate the similarity of industrial technologies and input structures of the ASEAN-4, Japan, and other Pacific Rim economies. While there are some similarities in industrial technologies with Japan, input structures are dissimilar. Interdependence increased between the ASEAN-4, Japan and the United States. Increases in US final demand had a larger impact on ASEAN-4 textile exports, however, than did increases in Japanese final demand.