Was the expansion of housing credit in Japan good or bad?

This paper shows, using data from the Family Income and Expenditure Survey, that housing credit has become increasingly available over time in Japan, especially since 2000, and that this has made it easier for Japanese households to purchase housing and enabled them to do so at an earlier age. However, it also shows that the greater availability of housing credit has increased households’ housing loan repayment burden, which has resulted in their cutting back on their other consumption expenditures and created the potential for retirement insecurity. Another concern is that the increasing availability of housing credit has been accompanied by a pronounced shift from fixed-rate to variable-rate housing loans. This is cause for concern given the low level of financial literacy that prevails among the Japanese population and the likelihood that interest rates on variable-rate housing loans will be raised sooner or later as monetary policy is tightened.     

Household responsibility system and China's agricultural Growth revisited: Addressing endogenous institutional change

The rise of the Household Responsibility System has been widely viewed as a significant contribution to China's agricultural growth. However, this empirical conclusion is rested upon a convenient but doubtful presumption that the process of institutional change, also known as decollectivization, is exogenous. We contribute to this literature by explicitly recognizing the endogeneity of institutional changes, and exploit exogenous variations in lagged weather shocks and initial fixed assets for consistent estimation. With improved data on irrigation, mechanization, weather and institutional changes in a provincial panel data during 1970–1987, the results of panel instrumental estimations reveal that the Household Responsibility System had a significantly positive effect on China's agricultural growth, which was larger than indicated by OLS estimates that suffer from adverse selection and attenuation biases.     

The Competitive Advantage of Collaboration – Throwing New Light on The Nordic Model

ABSTRACT

In one of the most influential contributions to modern political economy, Hall and Soskice have launched a distinction between ‘liberal’ and ‘coordinated’ market economies, placing the Nordic countries firmly in the latter category. We argue that, while the H&S distinction may serve classificatory purposes, seeing the Nordic model in terms of ‘coordinated capitalism’ blurs the distinctive features of the Nordic countries’ success as productive and fair economies. We contend that the central formula behind this success lies in what we call the Nordic model’s ambidexterity – the capacity to combine collaborative and competitive elements and skilfully navigate between them. Using an interdisciplinary perspective (inspired by organisation theory, cultural semiotics and evolutionary analysis), we provide a conceptual basis for reinterpreting the Nordic Model as an ambidextrous combination of culturally rooted, collaborative strategies that are subsequently competitively exposed. The article illustrates the workings of this ambidexterity in three societal domains: work life (including female participation), resource management – illustrated by the Norwegian petro-economy – and international business management and regulation with a focus on CSR. In each case we will show how collaboration is intertwined with pragmatic competitive exposure, yielding high productivity, high welfare, as well as fair income and wealth distribution.     

The Role of Inflation Target Adjustment in Stabilization Policy

How and under what circumstances can adjusting the inflation target serve as a stabilization-policy tool and contribute to welfare improvement? We answer these questions quantitatively with a standard New Keynesian model that includes cost-push-type shocks. Our proposed inflation target rule calls for the target to be adjusted in a persistent manner and in the opposite direction to the realization of a cost-push shock, which is essentially a makeup strategy. The inflation target rule, combined with a Taylor-type rule, significantly reduces inflation fluctuations originating from cost-push shocks and mitigates the stabilization trade-off, resulting in a similar level of welfare to that associated with the Ramsey optimal policy.     

Capital controls and the location of industry

This paper studies capital controls on the outflow of capital in a two-region new economic geography model. Capital controls are set in a non-cooperative or cooperative manner by social planners. Capital controls are relatively higher in the North in the non-cooperative equilibrium. This leads to relatively more firms located in the region where more consumers reside under the non-cooperative equilibrium. The locational bias towards the North in the non-cooperative equilibrium becomes larger as trade barriers are reduced. That is, firms locate to the North at a relatively higher rate in the non-cooperative equilibrium as trade is liberalised. Contrary to previous findings, it follows that global welfare is relatively higher in the non-cooperative equilibrium, although the social planner sets capital controls by maximising joint regional welfare in the cooperative equilibrium.     

Drivers of cropland abandonment in mountainous areas: A household decision model on farming scale in Southwest China

Cropland abandonment has emerged as a prevalent phenomenon in the mountainous areas of China. While there is a general understanding that this new trend is driven by the rising opportunity cost of rural labor, rigorous theoretical and empirical analyses are largely absent. This paper first develops a theoretical model to investigate household decisions on farming scale when off-farm labor market is accessible and there is heterogeneity of farmland productivity and distribution. The model is capable of explaining the hidden reasons of cropland abandonment in sloping and agriculturally less-favored locations. The model also unveils the impacts of heterogeneity of household labor on fallow decisions and the efficiency loss due to an imperfect labor market. The model is empirically tested by applying the Probit and Logit estimators to a unique household and land-plot survey dataset which contains 5258 plots of 599 rural households in Chongqing, a provincial level municipality, in Southwest China. The survey shows that more than 30% of the sample plots have been abandoned, mainly since 1992. The econometric results are consistent with our theoretical expectations. This work would help policy-makers and stakeholders to identify areas with a high probability of land abandonment and farming practice which is less sustainable in the mountainous areas.     

Assessment of mobility inequalities and income data collection. Methodological issues and a case study (Douala,Cameroon)

In order to understand the scale and nature of inequalities in intra-urban mobility we need reliable income data, but this is generally difficult to collect in household surveys. The methodological approaches that are employed to overcome difficulties in income data collection may affect the relative position of individuals and households within the income distribution and our estimates of mobility inequalities. In the context of a case study of Douala, this paper evaluates how the way income data is collected affects its accuracy and therefore the measurement of daily mobility inequalities. Simplified data collection tends to minimise the scale of inequalities as it misrepresents the income distribution. The error is greater in remote zones. Shortcomings in the statistical apparatus with regard to income data thus blur our perception of mobility inequalities and impede investigation of the links between daily travel, poverty and social exclusion.     

Constructive and computable Hahn–Banach theorems for the (second) fundamental theorem of welfare economics

The Hahn–Banach Theorem plays a crucial role in the second fundamental theorem of welfare economics. To date, all mathematical economics and advanced general equilibrium textbooks concentrate on using non-constructive or incomputable versions of this celebrated theorem. In this paper we argue for the introduction of constructive or computable Hahn–Banach theorems in mathematical economics and advanced general equilibrium theory. The suggested modification would make applied and policy-oriented economics intrinsically computational.     

German stagnation versus Swedish progression: gender wage gaps in comparison, 1960–2006

This article provides a comparative analysis of the development of the gender wage gap in West Germany and Sweden during the period 1960–2006. Despite the economic similarities including broad social safety nets, the gap has developed differently since 1960. This analysis accounts for micro- and macroeconomic factors and politics and concludes that norms and traditions penetrate institutional settings and ensnare Germany in a cultural trap with regard to gender equality. While Sweden has moved to a two-earner model, German society expects mothers to stay at home. The micro analysis shows that family concerns (e.g. marriage and motherhood) decrease female income in Germany to a far greater extent than do such factors in Sweden, which can be explained in part by deeply held social attitudes.