On the reduction of frequency curves

1. When a frequency distribution is given, it is often important to know whether the corresponding frequency curve is Gauss' normal curve, and if not, whether it can be reduced to one by an adequate change of variable, i.e. by changing bhe method of measuring the attribute. In this note I will give a simple method by which an arbitrary frequency curve may be reduced.     

Estimating Non‐Keynesian Effects for Japan

Is a fiscal stimulus effective? This classical question has received significant research attention since the collapse of the global financial services firm Lehman Brothers. Although most studies agree on the existence of Keynesian multiplier effects, several studies also demonstrate the existence of non‐Keynesian effects. What explains this lack of consensus in the literature? In this paper, we aim to bridge the two views by estimating a near‐vector autoregressive system that includes interaction terms of fiscal instruments, and the debt‐to‐gross domestic product (GDP) or the primary‐deficit‐to‐GDP ratios. Moreover, to embed the dynamics of the debt‐to‐GDP ratio in the analysis, we explicitly incorporate the government budget constraint. By computing and comparing the impulse response functions, we find Keynesian effects when fiscal conditions are sound, and non‐Keynesian effects when the primary deficit is large.     

Distributional preference in Japan

Using experiments developed by Engelmann and Strobel ( 2004 ), this study investigates distributional preference in Japan. We find that just over half the people in the study have a maximin preference, approximately 7 to 19% have an efficiency preference, approximately 8% have a self‐interest preference, and approximately 18% chose the allocation that would reduce the payoff to the rich and the poor, given that her/his payoff would remain constant. The last preference could be interpreted as what is referred to as “malice”, “deep envy” or a “feeling of vulnerability” in behavioural economics and cross‐cultural psychology.     

Preestablished harmony: The Japanese government's demand for Japanese government bonds

The Japanese government is heavily indebted but the yield on the Japanese government bond (JBG) remains low to date. We hypothesize that the presence of the Japanese government as a large stable investor of JGBs exerted a stabilizing influence on private JGB traders and thus rendered the risk premium for sovereign default negligible. To identify the influence of a large stable JGB holder, we utilize a surprise change in the policy stance toward public debt holding as a quasi-experiment. We estimated a VARMA model using daily data and found that an announced government withdrawal led to a 50-basis-point increase in the yields of 10-year JGBs. Our study suggests that large public debt holding reduces the risk premium and is one factor behind the low yield.