LIQUIDITY CONSTRAINTS IN A MONETARY ECONOMY*

This article presents a microfounded model of money with a consumption and an investment market. We consider an economy in which only part of the investment returns can be pledged. A liquidity constraint arises when the pledgeable part of the returns are not enough to pay for investment costs. We show that when the liquidity constraint is binding, agents may make a cash downpayment and money can perform two roles—as a provider of liquidity services and exchange services. The liquidity constraint constitutes a channel though which underinvestment occurs even at low inflation rates.     

Why Has Japan Failed to Escape from Deflation?

Japan has failed to escape from deflation despite an extraordinary monetary policy easing over the past 4 years. Monetary easing undoubtedly stimulated aggregate demand, leading to an improvement in the output gap. However, since the Phillips curve was almost flat, prices have hardly reacted at all. Against this background, the key question is why prices were so sticky. To examine this, we use sectoral price data for Japan and seven other countries including the USA, and use these data to compare the shape of the price change distribution across the eight countries. Our main finding is that Japan differs significantly from the other countries in that the mode of the distribution is very close to zero for Japan, while it is near 2% for other countries. This suggests that while in the USA and other countries the “default” is for firms to raise prices by about 2% each year, in Japan the default is that, as a result of prolonged deflation, firms keep their prices unchanged.     

Teleconferencing in Japan : Use of audio conference systems and evolution towards video

The author considers the impacts of teleconferencing on business organizations in Japan. The findings presented are based on a survey of six companies currently using audio conferencing systems. It was found that real-time information exchange and speedy decision making were the chief benefits. While some time had been saved by reduced business travel, overall substitution for travel had not occurred. Several companies intend to install further audio systems, or plan to introduce video facilities in light of the disadvantages of audio, even though this involves considerable expenditure. Thus, given the potential for more economical systems with new digital sampling technology, the outlook for video is promising.     

Focusing device as innovation mechanism and cluster growth

This paper models a focusing device of innovation in which a cluster has an o-ring type production function and each technology component endogenously upgrades its quality. We show that provided the magnitude of innovation is the same across technology components, competitive equilibrium is an efficient mechanism by which core technology-driven innovations emerge with expanding inequality among clusters. Our result is in sharp contrast to bottleneck-removed innovation which is widely accepted. The inefficiency arises, however, when low-powered incentives, such as cost plus contracting, are employed to reward innovation. In this case, the corresponding factor price provides erroneous information regarding the potential benefits of innovation, which should be corrected by some form of policy intervention.     

商业信用合同的履行概率,其外部性及现金需求——中国案例

本文测算了商业信用合同违约风险对商业贸易和现金需求的影响。结果显示,外国直接投资企业为其贸易伙伴提供了大量商业信用,而中国的企业,无论是私营,还是国有企业,他们交易实行货到即时付款的比例很高。外国直接投资企业之所以是经济交易中信贷的提供者,是因为他们具有较高的商业信用合同执行技术(contract enforcement technology)。我们还发现商业信用合同的执行技术主要包括贸易物品的竞争力、竞争幅度、与地方政府的关系以及公司治理的性质。一个企业具有较高的合同执行概率,就可能提供大量的商业信用,并获得更大的交易量。合同执行技术对贸易交易量的弹性估计约为2.2。模拟显示如果合同执行概率提高,分布在75%,贸易交易量可增加24%,商业信用规模可增加30%。由于商业信用合约的不完备而导致的经济损失则是巨大的。此外,我们证实,高的商业信用合同执行技术通过商业信用量和交易量的增加而在经济中产生正外部效应。     

New office technology and the labour process in contemporary Japanese banking

Japanese banks account for the top nine of the world's ten biggest banks. Rationalization has led to increased control of employees in the sphere of labour management. This article examines labour management and working conditions in relation to the introduction of new office technology.     

A model of merchants

I propose a simple model of merchants who are specialized in buying and selling a homogeneous good. Facing the same frictions as in the buyer-seller direct trades, merchants can make profits with an ability to buy and sell many units of the good. They set the price to compete in the market and provide buyers with a strong likelihood of obtaining the good. This paper establishes a turnover equilibrium where some agents choose to become merchants endogenously. An interesting multiplicity can emerge.