Environmental tax policy in a model of growth cycles

Summary. The purpose of this paper is to consider environmental taxation which would control emissions of firms in a model of growth cycles. In the model presented below, the economy may experience two phases of growth and environmental quality: “the no-innovation growth regime” and “the innovation-led growth regime”. Aggregate capital and environmental quality remain constant in the no-innovation growth regime, while they perpetually increase in the innovation-led growth regime. The paper shows that the tax plays a key role in determining whether the economy stably converges to one of the two regimes or fluctuates permanently between them. It also shows that there is a critical level of the tax and that the economy obtains higher growth rates of capital and environmental quality by raising (or reducing) the tax if the initial tax is below (or above) the critical level. Received: April 2, 2001; revised version: March 21, 2002 RID="*" ID="*" This research reported here was conducted within the research project “Project on Intergenerational Equity” at Institute of Economic Research, Hitotsubashi University. I am deeply grateful to an anonymous referee for his or her insightful comments, which greatly improved the paper. I also thank Hiroshi Honda, Yasuo Maeda, Yuji Nakayama, and participants in workshops at Hitotsubashi University, Kyoto University, Nagoya University, Osaka University, University of Tsukuba, Yokohama National University, and University of Tokyo for their valuable comments and suggestions. Any remaining errors are mine.     

Japanese Rice Market Liberalization: A Competitive Equilibrium Approach

This paper quantifies the effect of Japanese rice imports on the Japanese rice market with special attention to the farmland market in the year 2000, based on information available in 1997. Tariff and quota policies do not affect the equilibrium price of rice and rent significantly, given the current acreage controls. The removal of the acreage control programme would reduce the autarky price of rice by 30%. With free importation of rice into Japan, the price of rice would be halved, and the potential increase in the consumer surplus could be 0.3% of the 1995 Japanese GDP.
JEL Classification Numbers: F14, Q17, Q18.     

Foreign Direct Investment, Local Content Requirement, and Profit Taxation

We develop a partial equilibrium model of foreign direct investment (FDI) in which identical foreign firms locate themselves in a host country to compete in an oligopolistic market for a non-tradeable commodity. The host country, assumed to be small in the market for FDI, makes use of two instruments, viz., a profit tax and a local content requirement, to compete for FDI in the international market. We assume the existence of unemployment in the host country. The structure of optimal instruments and their relationship to the number, and the relative efficiency levels, of the domestic firms, are established     

Japan’s output gap estimation and ℓ 1 trend filtering

This paper estimates Japan’s output gap using the recently developed ? ₁ trend filter, which is an alternative to the popular Hodrick–Prescott (HP) filter. This new filter provides a piecewise linear trend line, which means it possibly provides better output gap estimates than the HP filter does for an economy such as Japan that has experienced some structural breaks.     

Failure Discrimination and Rating of Enterprises by Semi-Definite Programming

We propose a new method forfailure discrimination and rating of enterprises using financialdata compiled from their balance sheets. No particular distributional assumption is made on the underlying data. Our method automatically discriminates and rates many enterprises using mathematical programming methods. We separate multi-dimensional data byhyperplane and hyper-ellipsoid, so that we can interpretthe results of classification from the geometric point of view. Theproblem to be solved here is a linear programming problem orsemi-definite programming problem which can be solved efficiently byinterior point algorithms. Numerical simulations usingreal data show that hyper-ellipsoid separation generates a result which can be used for practical purposes.