A Model of Financial Markets with Endogenously Correlated Rational Beliefs

This paper studies how communication amongst agents influences the equilibria of a financial economy. We set up a standard overlapping generations model with assets, while allowing for heterogeneous beliefs. The paper explicitly describes how communication causes the beliefs of the agents to be correlated. In particular, it is shown that communication may generate large fluctuations even if the unconditional probability beliefs themselves are independent. Because of the complex nature of the problem, we use simulations to examine the characteristics of the equilibria Part of the results presented in this paper is based on my Ph.D. thesis at Stanford University. I gratefully acknowledge the inspiration obtained from innumerable discussions with Mordecai Kurz about this subject over the years. Also, I appreciate comments from Kenneth J. Arrow and Peter J. Hammond as well as from the participants of the workshop at Stanford University, University of Tokyo and the 1st Illinois workshop in Economic Theory (University of Illinois at Urbana-Champaign) and the anonymous referee     

Contributions and Channels of Interindustry R&D Spillovers: An Estimation for Japanese High-tech Industries

This paper estimates the contributions of R&D spillovers to four high-tech industries in Japan—general machinery, electrical machinery, transportation machinery and chemicals—by estimating the trans-log cost and share functions that include the R&D stock variables of own and spillover-source industries. The candidates for spillover- source industries are selected on the basis of large R&D flow or R&D proximity. The R&D flow measures the spillover embodied in purchased intermediate goods using input–output coefficients. The R&D proximity measures the extent of similarity between a pair of industries of the distribution of R&D expenditures across research fields, and is expected to show the likelihood of spillover at the R&D stage. The results suggest that electrical machinery benefited from R&D in the chemical industry, through the purchase of intermediate goods, whereas general machinery and transportation machinery benefited from R&D in the metal products industry, through R&D proximity. There was no evidence of the chemical industry benefiting from R&D spillovers. These results clearly imply that the contributions and the channels of R&D spillovers are diverse, casting doubt on earlier studies that used weighted sums of R&D expenditures (or their stocks) of other industries as aggregate spillover variables.     

Research Note: Statistical Analysis on E-mail Magazines used by Japanese Prime Ministers

This paper presents a multiple regression analysis of the relationship between the frequencies of political keywords on cabinet e-mail magazines and cabinet approval ratings from the period of April 2001 to September 2009 in Japan. The authors found that Prime Minister Junichiro Koizumi was the only Prime Minister who utilized a cabinet e-mail magazine as a strong political tool. Other prime ministers from the Liberal Democratic Party failed to utilize this type of magazine as a tool. In addition, we concluded that Japanese voters did not highly value the Koizumi Cabinet’s economic performance, but highly evaluated its message in the electronic information space of political economy.     

Interpenetration of organization and market : Japan's firm and market in comparison with the U.S.

Resource allocation mechanisms used in the market and within the firm are quite often a mixture of the pure market principle and the pure organization principle. Market principles penetrate into the firm's resource allocation and organization principles creep into the market allocation. Interpenetration occurs to remedy the failure of pure principles other in the market or in the organization. After presenting this new perspective, we analyze resource allocation mechanisms in Japan and the U.S. One conclusion is that interpenetration patterns are rather different between the two countries due to institutional, economic and societal differences. We also analyze the ways in which these differences affect Japanese and American corporate behavior in such areas as diversification strategy, corporate financing, and innovation and venture business activity.     

Foreign Direct Investment and the Unionization Rate

Technological innovations improve the welfare of a country facing fixed terms of trade, but may lead to immiserization when the terms of terms of trade are adversely affected. This paper establishes that transport innovation can be immiserizing for a small country when the transport sector exhibits variable returns to scale. The release of resources from the transport sector triggers Rybczynski-like effects, and the resulting expansion (contraction) in the volume of trade and in the demand for transport services raises unit costs of these services, and may reduce welfare in the presence of decreasing (increasing) returns to scale. [411]     

Currency Regime and Monetary Autonomy. Empirical Evidence Using Recent and Global Data from 1990 to 2007

This paper analyzes the exchange rate regimes from the perspective of monetary independence. To be specific, using recent and global data, we examine the sensitivity of domestic interest rates to the international interest rate, by conducting co-integration tests and by estimating the adjustment speeds through error-correction model, for different de facto currency regimes and for different types of capital markets. Our estimation results basically support the traditional views of ‘impossible trinity’, as far as the cases with open capital markets are concerned. The floating regime shows the less sensitivity of domestic interest rates to the international interest rate than the fixed regime does, which implies some capacity for domestic monetary autonomy under the floating regime. The cases with closed capital markets, on the other hand, include the cases showing high sensitivity of interest rates in some emerging market economies, which might imply the ‘fear of floating’ hypothesis.     

Agricultural mechanisation and gendered labour activities across sectors: Micro-evidence from multi-country farm household data

The gender difference in employment across sectors is a critical element of gender inequality in rural livelihoods and welfare in developing countries. The role of production technologies, including agricultural mechanisation, in addressing gender inequality is increasingly explored. Knowledge gaps remain, however, including how agricultural mechanisation differentially affects labour engagements across sectors. This study aims to partly fill these knowledge gaps through micro-evidence from seven countries (Ethiopia, Ghana, Nigeria, Tanzania, India, Nepal and Vietnam), using several nationally representative panel data and supplementary data and applying correlated random effects double-hurdle models with instrumental variables. We find that the use of tractors and/or combine harvesters by the household induces a greater shift from farm activities to non-farm activities by female members than by male members. While statistical significance varies, these patterns generally hold consistently across all seven countries studied. These patterns also hold across different farm sizes. While these are short-term relations, agricultural mechanisation proxied by tractors and/or combine harvesters is one of the crucial contributors to gendered rural livelihood. Future studies should more closely investigate these patterns' underlying mechanisms and implications.     

Rise and Fall of Multinational Enterprises in Vietnam: Survival Analysis Using Census Data during 2000–2011*

This study examined the survival of multinational enterprises (MNE) in Vietnam during 2000–2011 using Cox hazard models. The characteristics and ownership structure of firms and the nationality of foreign partners are found to be associated with the probability of firm exit, with a firm having greater capital share of foreign partners surviving longer. An efficient local government requiring less time for bureaucratic procedures and inspections is found to be associated with a lower probability of MNE exiting. Meanwhile, transparency in business regulations and predictability in implementing central government policies accelerate the survival of highly competitive MNE.     

Experimental Study on Negotiation Process in Participatory Decision Making Process in a Community

In participatory decision making process in a community, plural participants, such as governmental agencies, local municipalities, citizen groups and private companies are involved in the process. For achieving resolution, the methodologies for sharing understanding on a problem and formation of cooperative relationship are important. In this paper, the game experiment for observing people??s behaviors in conflicts is designed. In the game experiment, subjects are asked to negotiate with their counterparts. The games have similarities with typical conflicts which can arise frequently in participatory decision making process. The role of communication in participatory decision making process is also discussed.