The “Impossible Trinity” Hypothesis in an Era of Global Imbalances: Measurement and Testing

We outline new metrics for measuring the trilemma aspects: exchange rate flexibility, monetary independence, and capital account openness, taking into account substantial international reserve accumulation that has taken place since the 2000s. Since 1990, the trilemma variables in emerging markets have converged towards intermediate levels, characterizing by managed flexibility, using sizable international reserves as a buffer while retaining some degree of monetary autonomy. We test the linearity of the trilemma, and find that the weighted sum of the three trilemma variables adds up to a constant. Thus, a rise in one trilemma variable should be traded‐off with a drop of the weighted sum of the other two.     

How do Chinese industries benefit from FDI spillovers?

Recently, Foreign Invested Enterprises (FIEs) in China have increased their investment in not only production activity but also R&D activity. This paper examines the impact of spillovers from such activities by FIEs on two types of innovations by Chinese domestic firms: Total Factor Productivity (TFP) and invention patent application, using comprehensive industry and province-level data. We evaluate such spillovers according to FIEs' ownership structure, the origin of foreign funds and whether they are from the same industry or from other industries. We find an interesting asymmetry between spillovers to TFP and invention patent applications; while we do not find significant intra-industry spillovers from FIEs but find robust inter-industries spillover related to TFP, we find substantial intra-industry spillovers promoting invention patent applications but no evidence of inter-industries spillovers. Furthermore, whereas spillovers from FIEs to Chinese firms' TFP stem from their production activities, the source of spillovers related to invention patent applications is mostly through their R&D activity. Our findings indicate a need for multidimensional evaluation of the role of FDI in developing countries.     

Weather Risk, Wages in Kind, and the Off-Farm Labor Supply of Agricultural Households in a Developing Country

This article investigates the effects of weather risk on the off-farm labor supply of agricultural households in a developing country, distinguishing different types of off-farm labor markets. A multivariate two-limit tobit model is applied to data from India. The regression results show that the share of the off-farm labor supply increases with weather risk, the increase is much larger in the case of nonagricultural work than in the case of agricultural wage work, and the increase is much larger in the case of agricultural wages paid in kind than in the cash wage case, suggesting farmers' considerations of food security.     

Theorizing Leisure's Roles in the Pursuit of Ikigai (Life Worthiness): A Mixed-Methods Approach

The purpose of this mixed-methods research project is to theorize the linkage between leisure experience and life worthiness, or what the Japanese call ikigai. A grounded theory analysis of photo-elicitation interview data from 27 Japanese university students led to the inductive development of a substantive theory. This theory was then tested based on online survey data collected from 669 Japanese students using structural equation modeling. Results indicate that leisure pursuits enhance students’ perception of ikigai when they are valued as enjoyable and/or effortful. Moreover, the balance between overall enjoyment and/or effort is found to be a key mediator in the relationship between valuable leisure experience and life worthiness. Ikigai comprises the subjective perceptions that one's daily life is worth living and that it is full of energy and motivation. Our findings are discussed in light of relevant leisure and well-being theories as well as their implications for practice.     

The emerging global financial architecture: Tracing and evaluating new patterns of the trilemma configuration

This paper investigates how the trilemma policy mix affects economic performance in developing countries. We find that greater monetary independence can dampen output volatility, while greater exchange rate stability is associated with greater output volatility, which can be mitigated by reserve accumulation; greater monetary autonomy is associated with higher inflation, while greater exchange rate stability and greater financial openness is linked with lower inflation; pursuit of exchange rate stability can increase output volatility when financial development is at an intermediate stage. Greater financial openness, when accompanied by a high level of financial development, reduces output volatility.     

人民币钉住美元面临重大选择

很高兴参与这个项目,我今天主要和大家讨论一些与汇率相关的问题,提点建议:     

Stability with regime switching

The purpose of this paper is to analyze the stability of systems of piecewise continuous differential equations, and to apply the results to a disequilibrium economic model. The discontinuity problem appears in disequilibrium models because of the so-called “short-side” rule. The concept of Filippov solution makes it possible to analyze the dynamic evolution of such a model. This paper demonstrates that (i) stability conditions for each subsystem are neither necessary nor sufficient for overall stability, except in special cases such as a system of linear differential equations in R² with two regimes separated by a linear boundary; (ii) several sufficient conditions for overall stability with many regimes are available; and (iii) stability theorems with regime switching are useful for disequilibrium economic models with several regimes.     

Underpricing, Subsequent Equity Offerings, and the Long-Run Performance of Japanese IPOs

Using data on IPOs that are issued in Japan during January 1975–March 1989, we examine the deliberate underpricing and overreaction hypotheses to explain high initial returns at offering dates. Specifically, we analyze the cross-sectional pattern of the short- and long-run performance of IPOs. The obtained results indicate that the deliberate underpricing theories which we examine are unable to explain the high initial returns on the Japanese IPOs. Furthermore, for the average of the IPOs, the empirical results are not consistent with the overreaction hypothesis. However, there is evidence consistent with the hypothesis that for a certain minority group of IPOs, the high initial returns occur due to overreactions by investors. We interpret the overall results as indicating that the high initial returns on the Japanese IPOs can be attributed to a mixture of both underpricing and investor overreaction. We conjecture that the binding regulations in Japan led to underpricing. This revised version was published online in August 2006 with corrections to the Cover Date.     

The evolution of the productivity dispersion of firms: a reevaluation of its determinants in the case of Japan

This paper contributes to the literature that empirically analyzes the evolution of productivity dispersion at the firm level and its determinants. We investigate the case of Japanese firms by using a firm-level panel dataset taken from a large-scale administrative survey for the years 1994–2003. We confirm that there was indeed an overall increase in productivity dispersion. Moreover, we find that the introduction of information and communication technologies (ICT) decreased the within-industry labor productivity dispersion, contrary to what has been found for some other countries. On the other hand, we find evidence of a significant and positive impact of internationalization on productivity dispersion.