Liquidity, infinite horizons and macroeconomic fluctuations

This paper develops a computable dynamic general equilibrium model in which corporate demand for liquidity is endogenously determined. In the model, liquidity demand is motivated by moral hazard, as in Holmström and Tirole (J. Politic. Econom. 106 (1998) 1). As a result of incorporating agency cost and endogenously determined liquidity demand, the model can replicate an empirical business cycle fact, the hump-shaped dynamic response of output, which is seldom observed in standard RBC dynamics. Further, in the model the corporate demand for liquidity from a financial intermediary (credit line, for instance) is pro-cyclical, while the degree of liquidity dependence (defined as liquidity demand divided by corporate investment) is counter-cyclical. These business cycle patterns are consistent with a stylized fact empirically verified in the lending view literature.     

Fostering cooperation between farmers and public and private actors to expand environmentally friendly rice cultivation: intermediary functions and farmers’ perspectives

This study investigates the intermediary functions and the farmers’ perspectives in the development and implementation of agri-environmental schemes in Shiga Prefecture of Japan by employing the innovation journey analysis and the statistical analysis. The innovation journey analysis demonstrates that the prefectural government served as an ‘innovation intermediary’ to: (1) provide a clear vision of sustainable agriculture for farmers and other actors, (2) create and reinforce both technological and market niches and (3) develop actor networks involving local actors. It also identifies the following roles of the Japan Agricultural Cooperatives (JAs) and the specialist wholesaler as innovation intermediaries to: (1) develop new farming materials such as fertilizers, (2) translate and deliver practical farming knowledge for farmers and (3) establish the market of environmental-friendly rice. Statistical analysis uncovers that farmers more appreciated the supports from the JAs than those from other intermediaries to participate in the schemes. Complemented by the innovation journey analysis, our findings suggest that the keys to increasing farmers’ participation in the schemes include a clear vision and economic incentives for farmers as well as the coordination among intermediaries who have different expertise.     

TFP growth slowdown and the Japanese labor market in the 1990s

Unemployment in Japan nearly tripled during the 1990s. Underlying this upsurge lie an increase in the probability of workers to lose their jobs and a decrease in the probability that the unemployed find jobs. This paper analyzes the sources responsible for these labor market changes in Japan in the decade of the 1990s. We build, calibrate, and simulate a neo-classical growth model with search frictions in the labor market. Using actual TFP data, the model is able to reproduce the path of unemployment and the job flows, as well as that of output. We find it to be the decrease in productivity, coupled with the reduction in hours worked, which curtails the profits of firms, inducing a drop in employment and an increase in unemployment.     

CHANGE DETECTION OF ORDERS IN STOCK MARKETS USING A GAUSSIAN MIXTURE MODEL

We propose a method for detecting changes in the order balance in stock markets by applying a stochastic model to the feature vectors extracted from the order‐book data of stocks. First, the data are divided into training and test periods. Next, a Gaussian mixture model is estimated from the feature vectors extracted from the order‐book data in the training period. Finally, the goodness of fit of the feature vectors in the test period over this model is calculated. Using the proposed method, we found that the order balances of stocks for which insider trading was reported were unusual. Copyright © 2014 John Wiley & Sons, Ltd.     

Do collective bargaining institutions crowd out discussion and implementation of firm‐related training programs? Evidence from Japan

The paper empirically examines labor‐management communication concerning in‐house training programs and its relation to the actual on‐ and off‐the‐job training policy and wage structure. Using governmental datasets from Japan, we study how different labor‐management communication institutions may affect the training interests of employers and employees differently. We classify these institutions in terms of whether they have a legal (i.e. statutory) foundation (‘de jure’) or not (‘de facto’). We find that collective bargaining, with legal grounds, may crowd out employees’ willingness to communicate about training. However, the existence of ‘de facto’ communication channels such as joint labor‐management councils or shop floor committees is positively correlated with both on‐ and off‐the‐job of training. At the same time, the existence of unions is positively correlated with the steepness of wage profiles for mid‐career workers, which is consistent with the fact that employers and employees assume a long‐term relationship. Thus, we show that a multi‐tiered structure of labor‐management communication, together with a long‐term orientation toward the employment relationship, contributes to strengthen employees’ voice in training matters.     

Political Economy of Trade Openness and Government Size

This paper proposes a theoretical model that may provide useful insights into the relationship between trade openness and the size of government, as well as a possible explanation for the results of empirical tests of such a relationship. We develop a Hecksher–Ohlin model with publicly provided goods, where the level of publicly provided goods is determined in a probabilistic voting framework. In this context, we show that the start of trade may increase or decrease government size depending on the capital‐labor ratio in each country.     

Education and the Public Goods Type of Social Capital: Are the Well Educated Free Riding in the Provision of Public Goods?

In the previous literature, education has been found to promote the individual’s investment in social capital. However, little is known about its effect on the public goods type of social capital as many of the studies have used generalized measures of social capital. Using survey data from Japan with information on participation in neighborhood associations and community activities, we find that individuals with higher education are no more likely than those with compulsory minimum education to invest in the public goods type of social capital. Nor do we find evidence that the more educated free ride on the less educated in the provision of public goods.