Can IT be Japan's savior?

This paper constructs a multi-sector model to take explicit account of the very sharp change in the relative price between non-IT and IT goods. The model is calibrated to the Japanese economy, and its solution path from 1990 on is compared to Japan's macroeconomic performance in the 1990s. Compared to the one-sector analysis of Japan in the 1990s [Hayashi, F., Prescott, E.C., 2002. The 1990s in Japan: A lost decade. Rev. Econ. Dynam. 5, 206–235], our model does slightly better or just as well in accounting for Japan's output slump and does worse in accounting for the capital–output ratio. We also show that, to revive a 2% long-term growth in per capita GDP, Japan needs to direct 10% of private total hours to the IT sector. J. Japanese Int. Economies 19 (4) (2005) 543–567.     

Production externalities and local dynamics in discrete-time multi-sector growth models with general production technologies

The present paper examines the dynamic properties of discrete-time, multi-sector growth models in the presence of sector-specific externalities. It extends the literature by allowing for multiple capital good sectors with general social constant returns production technologies. We establish conditions for the steady-state equilibrium to be locally determinate or locally indeterminate, depending crucially on the ratios of the social to private marginal products and the number of capital good sectors. We show that when the ratios of the social to private marginal products are uniform across all sectors, the steady state is always locally determinate in a two-sector model, although local indeterminacy might still arise when the economy features more than two sectors.     

Voluntary Export Restraints and Economic Welfare: A General Equilibrium Analysis

We derive some sufficient conditions for the Suzumura-Ishikawa proposition on voluntary export restraints to hold when their model is extended to a general equilibrium framework. The sufficient conditions are concerned with the magnitude of income effects which play no role in the partial-equilibrium analysis of Suzumura and Ishikawa.     

Gains From Trade in a Cournot–Nash General Equilibrium

It is shown that, in a context of Cournot–Nash general equilibrium, free trade is potentially gainful for each trading country. No restrictions are placed on the numbers of products, factors of production or countries, or on the nature of returns to scale. Moreover, preferences, techniques and factor endowments can differ from agent to agent.
JEL Classification Numbers: F10, F12, F13, F15.     

Advances on Stackelberg open-loop and feedback strategies

In this paper, we study a familiar type of dynamic games called "common-property resource games" to establish the following results. First, the Stackelberg equilibrium may not exist in some cases, with open-loop strategies as well as with feedback strategies. Second, an explicit example is given to show that under feedback strategies, the best linear strategy on the part of the leader is inferior to a nonlinear strategy so that it is dangerous to confine our search to the Stackelberg equilibrium in the space of linear functions. Most importantly, we establish an "Implementation Lemma", which allows us to develop one methodology to obtain the Stackelberg equilibrium with feedback strategies when the equilibrium is assumed to exist.     

The industry origins of Japanese economic growth

This paper presents new data on the sources of growth for the Japanese economy over the period 1960–2000. The principal innovation is the incorporation of detailed information for individual industries, including those involved in the production of computers, communications equipment, and electronic components as information technology equipment. We show that economic growth is dominated by investments and productivity growth in information technology, both for individual industries and the economy as a whole. We also show that the revival of total factor productivity growth accounts for the modest resurgence of the Japanese economy since 1995. J. Japanese Int. Economies 19 (4) (2005) 482–542.     

Recent Challenges to the Classical Gains–from–Trade Proposition

The classical gains–from–trade conjecture was finally given a thorough Arrow–Debreu proof in 1972. Since then, the proposition has been repeatedly challenged. Some of the challenges rest on grounds which in no respect violate Arrow–Debreu assumptions. Those challenges are therefore without foundation. The remaining challenges rest on the assertion that some of the Arrow–Debreu assumptions are unnatural and unnecessarily restrictive or on the imposition of artificial restrictions on the set of permissible compensatory transfers. We conclude that none of the challenges can be sustained.     

On Chamberlinian-Ricardian Trade Patterns

This study provides a simple, many‐industry model of trade which emphasizes the interaction between cross‐country technical heterogeneity (i.e., a Ricardian aspect) and monopolistic competition among producers of differentiated products (i.e., a Chamberlinian aspect) as determinants of trade patterns. It is shown that the emergence of intra‐industry trade is crucially dependent on the shape of the technology index schedule, which is obtained as a step‐function.     

Comparative statics for profit-maximizing and labor-managed cournot oligopolies

Comparative static results are derived for two types of oligopoly: profit-maximizing and labor-managed Cournot oligopolies. After establishing a general principle for comparative statics for oligopoly, we will examine how a shift in the demand function, changes in the wage rate, indirect tax rates and fixed costs, and technical change affect the equilibrium Cournot industry and firms‘ outputs, firms’ profits and dividends per unit of labor. We will also analyze the effects of entry. Our analysis makes an extensive use of the relationship existing between an individual firm's and industry outputs. We will derive two kinds of stability conditions: one behavioristic and the other computational. Finally, we will conduct comparative static analysis for mixed oligopoly where several profit-maximizing and labor-managed firms co-exist.