Transport development and the evolution of economic geography

In this paper, based on the recent advances in the new economic geography (e.g., Fujita et al. [12]), we analyze impacts of transport costs on the spatial patterns of economic agglomeration. We first identify prototypes from the existing models, and explain the mechanism of how transport costs influence the balance between economic forces of agglomeration and dispersion. We then investigate the transformation of the agglomeration/dispersion patterns given gradually decreasing transport costs for different goods.Received: Received: July 2004 / Accepted: January 2005, Accepted: Received: July 2004 / Accepted: January 2005, JEL Classification: R12Tomoya Mori: Correspondence toThe authors are grateful to David Bernstein, Tatsuo Hatta, Komei Sasaki, Tony E. Smith, and two anonymous referees for their valuable comments. This research is partly supported by The Grant in Aid for Research 08403001 of Ministry of Education, Science and Culture in Japan, the Murata Science Foundation, and WESCO Civil Engineering Technology Foundation.     

Mobile money,risk sharing,and educational investment: Panel evidence from rural Uganda

We examine the impact of the rapidly expanding mobile banking service “mobile money” on rural households' ability to smooth investment in schooling after a negative shock. We find that a negative shock induces a 9.3‐percentage point decrease in per school‐age child educational expenditure for households who do not use mobile money compared to an 8.3‐percentage point decrease for households that have adopted mobile money. The underlying mechanism is an increase in remittance receipt and the diversity of senders owing to the reduction in transactions cost provided by mobile money. We show that our results are robust to alternative mechanisms. We use the expansion in mobile money agent network as an exogenous variation in access to mobile money.     

Credit channel of monetary policy in Japan: resolving the supply versus demand puzzle

The credit view is that a monetary tightening affects the real economy by shifting the supply schedule of bank credit left. While bank credit typically contracts following a monetary tightening, the financial contraction does not necessarily mean a shift of the supply schedule. Testing the credit view requires the identification of the shifts of the demand and supply schedules of credit. Using an original approach, this study shows that the credit view is supported for Japan. The credit view is, however, composed of two different views, namely the lending view and the balance-sheet view. While the balance-sheet view implies that the cutback of lending has no impact on the real economy, the lending view implies independent impacts of the cutback. Given the acceptance of the credit view, this study further attempts to test the balance-sheet view against the lending view.     

INTERNATIONAL TAX COMPETITION AND DOUBLE TAXATION

This paper examines international tax competition, with respect to both corporate income tax rates and tax rules for double taxation. Unlike existing studies, this study assumes that governments set non-discriminatory tax rates on domestic- and foreign-sourced corporate income and can choose no tax allowance as the tax rule. Consequently, the Nash equilibrium outcomes contradict the intuition underlying previous studies: no tax allowance is chosen as the tax rule where world economic welfare can be maximized. A capital-exporting country gains whereas a capital-importing country loses, compared to the case where there is a tax allowance of any kind.     

Skills, agglomeration and segmentation

This paper studies the role of skill heterogeneity in “new economic geography” models of location. In our setting, products are both horizontally and vertically differentiated, and producing higher quality goods requires workers with higher skills. Selling to customers based in a different location entails iceberg-type transport costs and additional “communication costs” consisting of a fixed quality loss. We show that the presence of pecuniary externalities creates a mechanism which always promotes spatial sorting of workers according to their skill levels. In particular, in all stable equilibria, workers with higher skill choose to stay in the location where aggregate skill and income is higher, while the less skilled stay in the other.     

International tax competition with endogenous sequencing

This paper examines endogenous timing in an international tax competition model. Unlike existing studies, governments are assumed to decide not only tax rates but also whether they are set early or late. The Nash equilibrium provides four conclusions for alternative double tax allowances. First, tax deductions cause simultaneous tax competition, whereas tax credits yield sequential tax competition. Second, any double taxation relief would generate capital trade. Third, a credit system could maximize one country’s economic welfare but would lower another country’s economic welfare more than a deduction regime. Fourth, a home country’s government would choose credit regimes under a maximax rule, but select deduction methods under minimax and maximin rules, while all double tax allowances are indifferent to a host country. The findings resolve the question raised by Bond and Samuelson (Economic Journal 99:1099–1111, 1989) of why governments choose tax credits when tax deductions are clearly better. Namely, this paper shows that one country is better off but another is worse off with credits rather than deductions. Accordingly, we cannot clearly specify whether governments choose credit systems or deduction regimes. The possible double tax allowances employed by the governments depend on their own decision criterion.     

Maternal full-time employment and overweight children: Parametric, semi-parametric, and non-parametric assessment

We use the matched mother-child data from the 2000 wave of the US National Longitudinal Survey of Youth 79 (NLSY79) to assess the impact of full-time working mothers on children’s body mass index (BMI) and the likelihood of becoming overweight. Parametric, semi-parametric and non-parametric methods are employed to correct the bias of selection on observables and unobservables. Pros and cons of various methods are discussed and specification tests are conducted. In general, we find that a mother’s full-time employment does have some impact on her children’s BMI and likelihood of becoming overweight across models and inference procedures.     

Endogenous Alleviation of Overreaction Problem by Aggregate Information Announcement

It is well‐known that agents overreact to public information in markets characterized by strategic complementarities. We propose a simple and implementable method of alleviating the overreaction problem. Extending the beauty‐contest game of Morris and Shin to a multi‐region economy, we show that, under an aggregate information announcement, each agent converts purely public information into imperfect public information endogenously. This makes the agents’ beliefs dispersed and alleviates the overreaction problem. Moreover, we compare the welfare effect of the aggregate information announcement with that of a separate announcement. We find that there exist plausible situations where the aggregate information announcement is better than the separate information announcement despite reduced quality.