Template-Type: ReDIF-Paper 1.0 Title: Strategic R&D Policy in a Quality-Differentiated Industry with More than Two Exporting Countries Author-Name: Naoto Jinji Author-Name-First: Naoto Author-Name-Last: Jinji Author-Name: Tsuyoshi Toshimitsu Author-Name-First: Tsuyoshi Author-Name-Last: Toshimitsu Abstract: In this paper, we examine strategic R&D policy for quality-differentiated products in a thirdmarket trade model. We extend the previous work by adding a third exporting country, so that the market structure is international triopoly. We show that the presence of the third exporting country affects strategic R&D policies. With three exporting countries, the lowest-quality exporting country gains from taxing domestic R&D and the middle-quality exporting country gains from subsidizing domestic R&D under both Bertrand and Cournot competition. As in the duopoly case, however, the unilaterally optimal policy for the highest-quality exporting country depends on the mode of competition. Various cases of policy coordination by exporting countries are also examined. Length: 33 pages Creation-Date: 2010-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-09-001.pdf File-Format: application/pdf Classification-JEL: F12, F13 Keywords: strategic trade policy, R&D subsidy/tax, vertical differentiation, oligopoly Handle: RePEc:kue:dpaper:E-09-001 Template-Type: ReDIF-Paper 1.0 Title: Global Reuse and Optimal Waste Policy Author-Name: Hide-Fumi Yokoo Author-Name-First: Hide-Fumi Author-Name-Last: Yokoo Author-Name: Thomas C. Kinnaman Author-Name-First: Thomas Author-Name-Last: Kinnaman Abstract: Exporting used durable goods for additional consumption in a developing economy, a concept we call \global reuse", has unfortunate negative consequences if those goods contain toxic substances. The cathode ray tubes (CRTs) of televisions and personal computers contain large amounts of lead oxide and cadmium - substances harmful to the natural environment and to human health. But unfortunately the importers of used durable goods rarely possess the technologies, policies, and en- forcement infrastructures necessary to appropriately dispose hazardous waste. A simple general equilibrium model of two-country trade is constructed to discover solutions to the problems associated with global reuse, focusing on policies in de- veloped country. This paper shows that the dual policy of waste tax and exporting tax can achieve social optimum under global reuse economy with negative exter- nality of waste. When developed country is unable to assess exporting tax perhaps due to some pressure from a domestic industry, the waste tax or subsidy can be the alternative policy. Length: 21 pages Creation-Date: 2010-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-09-002.pdf File-Format: application/pdf Keywords: international trade, pollution tax, reuse, second-hand market, waste Handle: RePEc:kue:dpaper:E-09-002 Template-Type: ReDIF-Paper 1.0 Title: Firm Heterogeneity and the Structure of Export and FDI:Evidence from Japanese Manufacturing Industries Author-Name: Ayumu Tanaka Author-Name-First: Ayumu Author-Name-Last: Tanaka Abstract: The percentage of exporters and multinational enterprises (MNEs) varies substantially across industries. We extend the firm heterogeneity model presented in Helpman et al. (2004) to derive testable predictions about the prevalence of these internationalized modes. The model indicates that intra-industry firm heterogeneity and R&D intensity play large roles in the inter-industry variation of the number of internationalized firms. We investigate whether these factors as well as import tariff affect the structure of export and foreign direct investment (FDI) using Japanese industry-level data. We obtain results that are consistent with the model. First, industries with larger productivity dispersion have a larger percentage of non-MNE exporters, a larger percentage of MNEs, and a larger percentage of the sum of exporters and MNEs. Second, MNEs are heavily concentrated in R&D intensive industries. In addition, we reveal that lower import tariffs raise the percentage of exporters and MNEs in line with Melitz (2003). Length: 21 pages Creation-Date: 2010-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-09-003.pdf File-Format: application/pdf Classification-JEL: F1, F23 Keywords: Firm heterogeneity, Multinationals, Exports, Foreign direct investment Handle: RePEc:kue:dpaper:E-09-003 Template-Type: ReDIF-Paper 1.0 Title: Intergenerationally Equitable Discounting and its Implications for Climate Policy Author-Name: Hiroaki Sakamoto Author-Name-First: Hiroaki Author-Name-Last: Sakamoto Abstract: This paper investigates the properties of intergenerationally equitable dis- counting by using an axiomatically well-founded welfare function which was originally developed by Epstein (1983), and more recently extended by Bommier and Zuber (2008). In stead of seeking for the appropriate value of social rate of time preference, intergenerational equity is incorpo- rated at axiomatic level. I show that the intergenerational-equity-consistent (IE-consistent) discount rate can be higher or lower than the standard no- time-preference case without appealing to uncertainty. The relationship between IE-consistent discount rates and risk of world extinction is also examined with an emphasis on the case where the hazard rate is endoge- nously determined. With an application to climate change, I show that endogenous hazard rate can increase the discount rate, which implies rel- atively less stringent carbon abatement as the optimal climate policy. Length: 37 pages Creation-Date: 2010-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-09-004.pdf File-Format: application/pdf Classification-JEL: D91, Q54, Q56 Keywords: Intergenerational Equity, Discounting, Climate Change, Uncertainty, Endogenous Hazard Rate Handle: RePEc:kue:dpaper:E-09-004 Template-Type: ReDIF-Paper 1.0 Title: Flexibility and Security Changes in the Labor Market and Consumption-led Growth in China Author-Name: Chengnan Yan Author-Name-First: Chengnan Author-Name-Last: Yan Abstract: The purpose of this paper is to determine the conditions necessary for Chinese economic growth regime change, that is, the change from export-led to consumption-led growth. Although there are different approaches to this difficult transformation, in this paper, we consider the problem in terms of the interrelationship between institutional reform and flexibility and security changes in the labor market. Given that one-sided growth in flexibility without a parallel increase in security support in the labor market has restricted domestic consumption demand growth, we analyze these changes and interactions using the flexicurity framework, in which flexibility and security in the labor market are increased simultaneously. We compare the success of the flexicurity strategies in Denmark and the Netherlands and find three key differences between them and the Chinese labor market flexibility and security changes. First, the main change is that, in China, numerical and functional flexibility were increased and employment security was decreased to a large extent. Second, the changes depend more on institutional reform and policy decisions by the government than on labor/industrial negotiations. Third, the role of social security systems (mainly unemployment insurance) is limited, and thus, income security decreases. Length: 21 pages Creation-Date: 2010-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-09-005.pdf File-Format: application/pdf Keywords: Export-led growth, Consumption-led growth, Flexicurity strategy, Employment system, social security system Handle: RePEc:kue:dpaper:E-09-005 Template-Type: ReDIF-Paper 1.0 Title: The relation of cause and effect between the percentage of foreign shareholders and the number of employees in Japanese firm Author-Name: Fukuda Jun Author-Name-First: Jun Author-Name-Last: Fukuda Abstract: Foreign shareholders have purchased many stocks issued by Japanese firms in recent years. Thus, they are expected to have a strong influence. In this paper, I analyze whether or not foreign shareholders demand changes in the number of employees in the firms of the foods, chemical, glass, electronic products, land transportation, warehousing or wholesale industries on the basis of the financial data from the fiscal year 1997 to 2007. The analysis showed that the number of employees increase if foreign shareholders purchase stocks in the chemical and land transportation since managers gain confidence if foreign investors actively invest their company. On the other hand, foreign shareholders tend to invest firms which are going to reduce the number of employees in the electronic product. Length: 11 pages Creation-Date: 2010-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-09-006.pdf File-Format: application/pdf Handle: RePEc:kue:dpaper:E-09-006 Template-Type: ReDIF-Paper 1.0 Title: Trade Offs in Alliance Capabilities: Case Studies of Pharmaceutical Firms in Japan Author-Name: Ryuichi Nakamoto Author-Name-First: Ryuichi Author-Name-Last: Nakamoto Abstract: Organizational capability is an important factor in sustaining competitive advantage. As yet, there have been no studies comparing organizational capabilities. This paper will examine the relationship between two capabilities: alliance partner selection and alliance implementation capabilities. Field research was conducted to examine the process of alliance partner selection and implementation with six pharmaceutical companies in Japan. This paper focuses on two companies reputed to have high alliance capabilities. One had a reputation for good partner selection, but a below-average capability for implementation. The other had the opposite - a below-average partner selection capability, with strong implementation capabilities. Based on a series of extensive interviews, it may be posited that there is an inverse relationship between partner selection and alliance implementation capabilities, involving a trade off of sorts. Length: 22 pages Creation-Date: 2010-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-09-007.pdf File-Format: application/pdf Keywords: Alliance capability, Partner selection capability, Implementation capability Handle: RePEc:kue:dpaper:E-09-007 Template-Type: ReDIF-Paper 1.0 Title: Accounting and Emotion:A Case Study of a Financial Institution Author-Name: Norio Sawabe Author-Name-First: Norio Author-Name-Last: Sawabe Author-Name: Kohji Yoshikawa Author-Name-First: Kohji Author-Name-Last: Yoshikawa Author-Name: Kosuma Shinohara Author-Name-First: Kosuma Author-Name-Last: Shinohara Abstract: This paper examines how accounting is implicated in strategizing practices at a financial institution. We investigate micro processes of strategizing in which proclaimed abstract concepts in the formally disclosed middle range plan are given concreted shape through everyday practices at local divisions, and examine the way in which accounting plays in the strategizing processes. In order to understand the relationships between strategy and accounting, we draw on a practice theory perspective (Ahrens & Chapman, 2007; Jorgensen & Messner, 2009 cf. Schatzki, 2005), which is helpful in picturing roles of accounting in micro processes of strategizing. In particular, this paper examines emotional aspects of accounting in everyday practices that give shape to the proclaimed strategic concepts in its middle range plan. This paper contributes to the existing literature on accounting and strategy by shedding lights on the way in which emotional aspects drive micro-processes of strategising and accounting. Length: 30 pages Creation-Date: 2010-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-09-008.pdf File-Format: application/pdf Keywords: management accounting, strategizing, emotion, practice theory, middle range plan, micro-process Handle: RePEc:kue:dpaper:E-09-008 Template-Type: ReDIF-Paper 1.0 Title: Precautionary Measures for Credit Risk Management in Jump Models Author-Name: Masahiko Egami Author-Name-First: Masahiko Author-Name-Last: Egami Author-Name: Kazutoshi Yamazaki Author-Name-First: Kazutoshi Author-Name-Last: Yamazaki Abstract: Sustaining efficiency and stability by properly controlling the equity to asset ratio is one of the most important and difficult challenges in bank management. Due to unexpected and abrupt decline of asset values, a bank must closely monitor its net worth as well as market conditions, and one of its important concerns is when to raise more capital so as not to violate capital adequacy requirements. In this paper, we model the tradeoff between avoiding costs of delay and premature capital raising, and solve the corresponding optimal stopping problem. In order to model defaults in a bank’s loan/credit business portfolios, we represent its net worth by appropriate L´evy processes, and solve explicitly for the double exponential jump diffusion process. In particular, for the spectrally negative case, we generalize the formulation using the scale function, and obtain explicitly the optimal solutions for the exponential jump diffusion process. Length: 33 pages Creation-Date: 2010-04 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-10-001.pdf File-Format: application/pdf Keywords: Credit risk management, Double exponential jump diffusion, Spectrally negative Levy processes, Scale functions, Optimal stopping Handle: RePEc:kue:dpaper:E-10-001 Template-Type: ReDIF-Paper 1.0 Title: Trade, Non-Scale Growth, and Uneven Development Author-Name: Hiroaki Sasaki Author-Name-First: Hiroaki Author-Name-Last: Sasaki Abstract: This paper investigates the relationship between trade and economic development using a two-country, non-scale-growth model. Depending on the share of the expenditure for manufactured goods, we obtain two di erent results with regard to long-run production patterns. If the share of the expenditure is less than or equal to half, the leader country diversifies while the follower country asymptotically specializes in agriculture completely. If, on the other hand, the share of the expenditure is more than half, the leader country completely specializes in manufacturing while the follower country asymptotically specializes in agriculture completely. Whether or not the follower country can catch up with the leader country in the long run depends on two factors: (1) the patterns of production in both countries and (2) the measure of economic welfare that is used, that is, per capita income or per capita consumption. Length: 35 pages Creation-Date: 2010-06 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-10-002.pdf File-Format: application/pdf Keywords: international trade, non-scale growth, uneven development Classification-JEL: F10, F43, O11, O41 Handle: RePEc:kue:dpaper:E-10-002 Template-Type: ReDIF-Paper 1.0 Title: A Model for Bank’s Optimal Asset Securitization Program Author-Name: Masahiko Egami Author-Name-First: Masahiko Author-Name-Last: Egami Author-Name: Kaoru Hosono Author-Name-First: Kaoru Author-Name-Last: Hosono Abstract: We propose a framework to examine banks’ asset securitization program. It provides a comprehensive view that explains various separate findings and claims in the literature. We derive optimal timing and quantity of banks’ asset securitization by explicitly incorporating stochastic asset returns and leverage constraints. We also quantify how much additional value can be created by asset securitization program, which gives some insights into why banks securitize assets. We further conduct some comparative analysis by varying the asset quality and economic environment, obtaining results that can account for the actual securitization trends including the bubble and crisis periods. Our empirical analysis using a Japanese data set also provide evidences that are consistent with our theoretical implications. Length: 17 pages Creation-Date: 2010-06 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-10-003.pdf File-Format: application/pdf Keywords: Asset securitization program, Leverage, Impulse control, Bubble and crisis Classification-JEL: D81, G21, G32 Handle: RePEc:kue:dpaper:E-10-003 Template-Type: ReDIF-Paper 1.0 Title: Do Sticky Prices Increase Real Exchange Rate Volatility at the Sector Level? Author-Name: Mario J. Crucini Author-Name-First: Mario Author-Name-Last: Crucini Author-Name: Mototsugu Shintani Author-Name-First: Mototsugu Author-Name-Last: Shintani Author-Name: Takayuki Tsuruga Author-Name-First: Takayuki Author-Name-Last: Tsuruga Abstract: We introduce the real exchange rate volatility curve as a useful device to understand the role of price stickiness in accounting for deviations from the Law of One Price at the sector level. In the presence of both nominal and real shocks, the theory predicts that the real exchange rate volatility curve is a U-shaped function of the degree of price stickiness. Using sector-level European real exchange rate data and frequency of price changes, we estimate the volatility curve. The results are consistent with the predominance of real effects over nominal effects. Nonparametric analysis suggests the curve is convex and negatively sloped over the majority of its range. Good-by- good variance decompositions show that the relative contribution of nominal shocks is smaller at the sector level than what previous studies have found at the aggregate level. We conjecture that this is due to significant averaging out of good-specific real microeconomic shocks in the process of aggregation. Length: 31 pages Creation-Date: 2010-07 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-10-004.pdf File-Format: application/pdf Keywords: Real exchange rates, Law of One Price, Sticky prices, Nonparametric test for monotonicity Classification-JEL: E31, F31, D40 Handle: RePEc:kue:dpaper:E-10-004 Template-Type: ReDIF-Paper 1.0 Title: Options on Multiple Assets in a Mean-Reverting Model Author-Name: Masahiko Egami Author-Name-First: Masahiko Author-Name-Last: Egami Author-Name: Tadao Oryu Author-Name-First: Tadao Author-Name-Last: Oryu Abstract: We solve two optimal stopping problems whose payoR functions are the maximum and the minimum of two state variables driven by the Ornstein-Uhlenbeck processes. We consider a class of problems where we obtain analytical solutions. Furthermore, by making use of the analytical results we study some properties of exercise regions including convexity, symmetry, and continuity. Length: 18 pages Creation-Date: 2010-07 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-10-005.pdf File-Format: application/pdf Keywords: American options on multiple assets, Optimal stopping, Mean-reverting model Classification-JEL: C11, G13 Handle: RePEc:kue:dpaper:E-10-005 Template-Type: ReDIF-Paper 1.0 Title: Trade Patterns and International Technology Spillovers:Theory and Evidence from Patent Citations Author-Name: Naoto Jinji Author-Name-First: Naoto Author-Name-Last: Jinji Author-Name: Xingyuan Zhang Author-Name-First: Xingyuan Author-Name-Last: Zhang Author-Name: Shoji Haruna Author-Name-First: Shoji Author-Name-Last: Haruna Abstract: In this paper, we develop a two-country model of monopolistic competition with quality differentiation by extending the model of Melitz and Ottaviano (2008) and examine the relationship between the bilateral trade structure and international technology spillovers. We show that bilateral trade patterns and the extent of technology spillovers will change, depending on the technology gap between two countries. We then test predictions of the model by using bilateral trade data among 44 countries and patent citation data at the U.S., European, and Japanese Patent Offices. We use patent citations as a proxy for spillovers of technological knowledge. Trade patterns are categorized into three types: one-way trade (OWT), horizontal intra-industry trade (HIIT), and vertical intra-industry trade (VIIT). Each of OWT and VIIT is further divided into two subcategories, based on the direction of trade. We find that intra-industry trade plays a significant role in technology spillovers. In particular, HIIT is associated with larger technology spillovers than VIIT, which confirms the predictions of the model. Length: 38 pages Creation-Date: 2010-10 Revision-Date: 2011-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-10-006.pdf File-Format: application/pdf Keywords: technology spillovers, patent citations, intra-industry trade, firm heterogeneity Classification-JEL: F12, O31, O33 Handle: RePEc:kue:dpaper:E-10-006 Template-Type: ReDIF-Paper 1.0 Title: How Well Do the Sticky Price Models Explain the Disaggregated Price Responses to Aggregate Technology and Monetary Policy Shocks? Author-Name: Jouchi Nakajima Author-Name-First: Jouchi Author-Name-Last: Nakajima Author-Name: Nao Sudo Author-Name-First: Nao Author-Name-Last: Sudo Author-Name: Takayuki Tsuruga Author-Name-First: Takayuki Author-Name-Last: Tsuruga Abstract: This paper documents empirically and analyzes theoretically the responses of disaggregated prices to aggregate technology and monetary policy shocks. Based on the price data of US personal consumption expenditure, we find that disaggregated price responses have features across shocks and across sectors that are difficult to explain using standard multi-sector sticky price models. In terms of shocks, a substantial fraction of disaggregated prices initially rise in response to a contractionary monetary policy shock, while most prices fall immediately in response to an aggregate technological improvement. In terms of sectors, the disaggregated price responses are correlated weakly with the frequency of price changes. We extend the standard model to reconcile these observations. We find that the cost channel of monetary policy and cross-sectional heterogeneity in real rigidity could pave the way for explaining these facts. Length: 45 pages Creation-Date: 2010-10 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-10-007.pdf File-Format: application/pdf Keywords: Sticky prices, Disaggregated in‡flation, Vector autoregressions, Monetary pol-icy, Total factor productivity Classification-JEL: E31, E32, E52 Handle: RePEc:kue:dpaper:E-10-007 Template-Type: ReDIF-Paper 1.0 Title: The Importance of the Retention Ratio in a Kaleckian Model with Debt Accumulation Author-Name: Hiroaki Sasaki Author-Name-First: Hiroaki Author-Name-Last: Sasaki Author-Name: Shinya Fujita Author-Name-First: Shinya Author-Name-Last: Fujita Abstract: Hein (2007) investigates the effects of debt of firms and interest rates on output and growth, and obtains the following three results. First, the long-run equilibrium is stable only if the short-run equilibrium is debt-led growth. Second, to obtain a positive long-run equilibrium value of the debt-capital ratio under the debt-led growth regime, extremely high interest rates are necessary. Third, the long-run equilibrium value of the rate of capital accumulation is increasing in interest rates and is independent of income distribution. However, these conclusions depend crucially on the assumption that the retention ratio of firms is equal to unity, and hence, that there is no dividend to shareholders. By relaxing the above assumption, we show in this paper that even the long-run equilibrium under the debt-burdened growth regime can be stable and that the long-run equilibrium value of the debt-capital ratio will be positive with plausible interest rates irrespective of whether the long-run equilibrium is debt-led growth or debt-burdened growth. Moreover, the effects of interest rates and income distribution on capital accumulation differ from regime to regime. Length: 27 pages Creation-Date: 2010-11 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-10-008.pdf File-Format: application/pdf Handle: RePEc:kue:dpaper:E-10-008 Template-Type: ReDIF-Paper 1.0 Title: Japanese Films Strike Back: Development of Promotional Alliances in the Japanese Film Industry in the 2000s Author-Name: Naoki Wakabayashi Author-Name-First: Naoki Author-Name-Last: Wakabayashi Author-Name: Jin-ichiro Yamada Author-Name-First: Jin-ichiro Author-Name-Last: Yamada Author-Name: Masaru Yamashita Author-Name-First: Masaru Author-Name-Last: Yamashita Author-Name: Ryuichi Nakamoto Author-Name-First: Ryuichi Author-Name-Last: Nakamoto Author-Name: Hiromi Nakazato Author-Name-First: Hiromi Author-Name-Last: Nakazato Abstract: Supporting the revival of domestic films in the Japanese market in the 2000s, we find the dynamic emergence of promotional alliances or “production consortia,” led by mainly television broadcasters with several media companies. In making local films, they make new conditions that partner organizations may not only share cost, risk and resources but also collaborate for short-term media mix demonstration, which attract Japanese audience again. The aim of this paper is to explore the development of alliance networks of the production consortium in the Japanese film industry and examine the characteristics that facilitate a high rate of performance through knowledge transfer and resources, from the viewpoint of organizational network analysis. Analyzing interfirm promotional alliances in the 2000s, we find that cohesive ties within an animation film consortium contributed to a high rate of performance. Length: 13 pages Creation-Date: 2010-11 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-10-009.pdf File-Format: application/pdf Keywords: Alliance Network, Social Capital, Cohesive Ties, Japanese Film Industry, Production Consortium Handle: RePEc:kue:dpaper:E-10-009 Template-Type: ReDIF-Paper 1.0 Title: Endogenous Phase Switch in Baumol’s Service Paradox Model Author-Name: Hiroaki Sasaki Author-Name-First: Hiroaki Author-Name-Last: Sasaki Abstract: This paper develops a two-sector model that considers Baumol’s service paradox. The paper simultaneously incorporates two ideas about technological progress in the model: (1) the consumption of services contributes to human capital accumulation and (2) the production of manufacturing leads to technological progress due to learning-by-doing. Accordingly, productivity growth in both services and manufacturing is endogenously determined. We show that initially, a shift in the employment share toward the services sector decreases the per capita real GDP growth rate, but at some point in time, the shift begins to increase the growth rate. Therefore, we observe an endogenous phase switch from a phase where the employment shift toward services depresses the economy to another where the employment shift promotes the economy. Length: 27 pages Creation-Date: 2010-12 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-10-010.pdf File-Format: application/pdf Keywords: service paradox, structural change, endogenous productivity growth Classification-JEL: J21, J24, O11, O14, O30 Handle: RePEc:kue:dpaper:E-10-010 Template-Type: ReDIF-Paper 1.0 Title: Solving Optimal Dividend Problems via Phase-Type Fitting Approximation of Scale Functions Author-Name: Masahiko Egami Author-Name-First: Masahiko Author-Name-Last: Egami Author-Name: Kazutoshi Yamazaki Author-Name-First: Kazutoshi Author-Name-Last: Yamazaki Abstract: The optimal dividend problem by De Finetti (1957) has been recently generalized to the spectrally negative Lévy model where the implementation of optimal strategies draws upon the computation of scale functions and their derivatives. This paper proposes a phase-type fitting approximation of the optimal strategy. We consider spectrally negative Lévy processes with phase-type jumps as well as meromorphic Lévy processes (Kuznetsov et al., 2010a), and use their scale functions to approximate the scale function for a general spectrally negative Lévy process. We obtain analytically the convergence results and illustrate numerically the effectiveness of the approximation methods using examples with the spectrally negative Lévy process with i.i.d. Weibull-distributed jumps, the β-family and CGMY process. Length: 34 pages Creation-Date: 2010-12 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-10-011.pdf File-Format: application/pdf Keywords: De Finetti’s dividend problem, phase-type models, Meromorphic Lévy processes, Spectrally negative Lévy processes, Scale functions Classification-JEL: G22, D81, C61 Handle: RePEc:kue:dpaper:E-10-011 Template-Type: ReDIF-Paper 1.0 Title: Cultural determinants of countries management efficiency:A random coefficients stochastic frontier approach Author-Name: Maria del Pilar Baquero Forero Author-Name: Toshifumi Kuroda Author-Name-First: Toshifumi Author-Name-Last: Kuroda Author-Name: Takanori Ida Author-Name-First: Takanori Author-Name-Last: Ida Abstract: From a country’s perspective, management refers to the organization of inputs, such as national capital or labor. In this paper, we investigate i) the mechanism in which countries management impacts national income, and ii) the cultural sources of di erent management levels among countries. We found that countries management mainly a ects income due to its interaction with physical capital, rather than through its relation with labor or education. Furthermore, management levels are shown to be positively correlated to language and religious homogeneity, the existence of Britishstyle institutions and the degree of individualism. Our methodology is twofold. First, using data of 62 countries from 1980 to 2004, we estimated a management input without the use of proxies. For this purpose, we employed a stochastic production frontier with random coecients. Second, we regressed by OLS the estimated management input on cultural variables, for a sub-sample of 33 countries with available cultural data. Length: 27 pages Creation-Date: 2010-12 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-10-012/e-10-012.pdf File-Format: application/pdf Keywords: Random coefficients stochastic production frontier, countries management, language and religious diversity, British-style institutions, individualism Classification-JEL: O43 Handle: RePEc:kue:dpaper:E-10-012 Template-Type: ReDIF-Paper 1.0 Title: Inequality aversion, social discount, and time discount rates Author-Name: Takanori Ida Author-Name-First: Takanori Author-Name-Last: Ida Author-Name: Kazuhito Ogawa Author-Name-First: Kazuhito Author-Name-Last: Ogawa Abstract: Purpose - We conduct a hypothetical dictator game with social distance and time delays using conjoint analysis. Design / methodology / approach - Responses from 1,347 Japanese adults are collected through an online survey, and their responses are analyzed using a random parameter logit model. Findings - Social preference for the present income of a stranger equals social preference for the income of an acquaintance 140 days later, of a close friend 224 days later, and of a family member 255 days later. Originality / value- We simultaneously estimate social preference parameters including the inequality aversion rate, the social discount rate, and the time discount rate Headings - Inequality aversion, social discount, and time discount Keywords - dictator game, inequality aversion, social discounting, time discounting Paper type – Research paper Length: 29 pages Creation-Date: 2010-12 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-10-013.pdf File-Format: application/pdf Handle: RePEc:kue:dpaper:E-10-013 Template-Type: ReDIF-Paper 1.0 Title: The Safer, the Riskier:A Model of Bank Leverage and Financial Instability Author-Name: Ryo Kato Author-Name-First: Ryo Author-Name-Last: Kato Author-Name: Takayuki Tsuruga Author-Name-First: Takayuki Author-Name-Last: Tsuruga Abstract: This note provides an example of a case where …nancial instability can be ampli…ed by stable fundamentals rather than risky fundamentals, using a variation of Diamond and Rajan (2009). Paper type – Research paper Length: 11 pages Creation-Date: 2011-02 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-10-014.pdf File-Format: application/pdf Keywords: Bank runs, Great moderation, Financial crisis, Maturity mismatch Classification-JEL: E3, G01, G21 Handle: RePEc:kue:dpaper:E-10-014 Template-Type: ReDIF-Paper 1.0 Title: Export of Deindustrialization and Anti-Balassa-Samuelson Effect: The Consequences of Productivity Growth Differential Author-Name: Hiroaki Sasaki Author-Name-First: Hiroaki Author-Name-Last: Sasaki Abstract: This paper focuses on productivity growth differentials between manufacturing and services, deindustrialization, and changes in the real exchange rate. Using a Ricardian trade model with a continuum of goods that introduces nontraded services, the paper investigates these interrelationships. The main results are as follows: (i) if deindustrialization proceeds in both home and foreign countries, then the ratio of home manufacturing employment share to foreign manufacturing employment share and the real exchange rate move in the same direction; (ii) even if the productivity growth di erential in the home country is greater than that in the foreign county, the extent of deindustrialization in the home country is not necessarily larger than that in the foreing country. On the contrary, it is possible that the foreign deindustrialization exceeds the home deindustrialization; and (iii) even if the productivity growth di erential in the home country is greater than that in the foreign county, the real exchange rate of the home country can depreciate contrary to the expectaion of the Balassa-Samuelson effect. Length: 24 pages Creation-Date: 2011-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-10-015.pdf File-Format: application/pdf Keywords: Productivity growth differentials, Deindustrialization, Real exchange rate, Shift in specialization patterns Classification-JEL: F10, F31, O14 Handle: RePEc:kue:dpaper:E-10-015 Template-Type: ReDIF-Paper 1.0 Title: Formalizing Debt-led and Debt-burdened Growth Regimes with Endogenous Macrodynamics of Minskian Financial Structure: A Long-run Analysis Author-Name: Hiroshi Nishi Author-Name-First: Hiroshi Author-Name-Last: Nishi Abstract: In this paper, we formally derive a version of the Minskian taxonomy of the firms’ financial structure (hedge, speculative, and Ponzi types), under the economic growth context in the long run. As for the economic growth, we formalize the mechanism of debt-led (debt-burdened) growth where the economy expands as the debt variables increase (decrease). By explicitly introducing the relationship between the finance growth regime and Minskian taxonomy in a dynamic model, the model in this paper enables us to evaluate whether or not the economic growth regime is sounded in terms of the firms’ financial positions. Length: 25 pages Creation-Date: 2011-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-10-016.pdf File-Format: application/pdf Keywords: Minskian financial structure, Economic growth, Post-Keynesian model Classification-JEL: E12, E22, E44, O42 Handle: RePEc:kue:dpaper:E-10-016 Template-Type: ReDIF-Paper 1.0 Title: Financialization and its Long-run Macroeconomic Effects in a Kalecki-Minsky Model Author-Name: Shinya Fujita Author-Name-First: Shinya Author-Name-Last: Fujita Author-Name: Hiroaki Sasaki Author-Name-First: Hiroaki Author-Name-Last: Sasaki Abstract: One of the main characteristics of “financialization” is the redistribution of income in favor of shareholders, at the expense of workers. In this paper, we interpret pro-shareholder redistribution as a decrease in both retention ratio and wage share. Using both the Kaleckian macroeconomic model and the Minskyan taxonomy of finance regime, we investigate the long-run effects of such parametric changes on the rate of capital accumulation and the debt-capital ratio, on the one hand, and on the financial structures of firms, on the other. A decrease in the retention ratio leads to higher capital accumulation, but makes financial structures fragile. Moreover, a rise in profit share improves the financial position in the long run if the short-run equilibrium is profit-led growth regime; this is not necessarily so with wage-led growth. Length: 28 pages Creation-Date: 2011-04 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-11-001.pdf File-Format: application/pdf Handle: RePEc:kue:dpaper:E-11-001 Template-Type: ReDIF-Paper 1.0 Title: Is the Long-run Equilibrium Wage-led or Profit-led? A Kaleckian Approach Author-Name: Hiroaki Sasaki Author-Name-First: Hiroaki Author-Name-Last: Sasaki Abstract: This paper presents a Kaleckian growth model in which (i) the rate of capacity utilization, the profit share, and the rate of employment are adjusted in the medium run, and (ii) the normal rate of capacity utilization and the expected rate of growth are adjusted in the long run. Both the Kalecki type and the Marglin-Bhaduri type investment functions are introduced. Using the model, we examine which regime is obtained in the long-run equilibrium, the wage-led regime or the profit-led regime. Length: 29 pages Creation-Date: 2011-04 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-11-002.pdf File-Format: application/pdf Keywords: Kaleckian model; long-run equilibrium; wage-led; profit-led Classification-JEL: E12; E24; O41 Handle: RePEc:kue:dpaper:E-11-002 Template-Type: ReDIF-Paper 1.0 Title: Shareholder Structure and Dividend Rate in Japanese Firms:Analysis Using Panel Data Author-Name: Fukuda Jun Author-Name-First: Jun Author-Name-Last: Fukuda Abstract: In Japan, the percentage of shareholders has increased while dividend rate has decrease. In previous years, the dividend rate is said to be lower in Japan than in USA or Europe. Dividend rates in Japanese firms could have increased as far as foreign shareholders have increased since most of them are thought to be institutional investors with market orientated commitment. In this paper I use data of manufacturing firms listed by the stock market since 1985 to 2009 splinted in two periods since character of corporate governance is thought to have changed since the second 1985. According to the analysis conclusions are summarized as follows: Foreign shareholders have consistently increased dividend rates since 1985. Moreover, there is no significant relationship between the percentage of financial institutions and dividend rates in the period 1985-1996. However, a reverse trend emerged from the second half of 1990s reflecting that the percentage of trust banks has increased and the commitment of financial institutions has change toward market approach. Additionally, nonfinancial firms had decreased dividend rate only by the late 1990s. This implies that nonfinancial firms had taken a role as stable shareholders changing its interest since then. Length: 29 pages Creation-Date: 2011-06 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-11-003.pdf File-Format: application/pdf Keywords: dividend rate, shareholder structure, corporate governance, panel data Classification-JEL: G30, G35 Handle: RePEc:kue:dpaper:E-11-003 Template-Type: ReDIF-Paper 1.0 Title: Fisheries Subsidies and Management in Open Economies Author-Name: Naoto Jinji Author-Name-First: Naoto Author-Name-Last: Jinji Abstract: The WTO members are conducting negotiations to clarify and improve disciplines on fisheries subsidies at the Doha Round. In this paper, I investigate how worldwide subsidy reform in the fisheries sector could affect fisheries output and resource stocks in a trading equilibrium. I demonstrate that the effects of a reduction in subsidies on fisheries output will differ, depending on the conditions of the economy and fisheries management in different countries. A possible outcome of a reduction in non-capacity-enhancing subsidies is that fisheries output will rise in countries where catch quotas are not enforced and remain the same in countries where catch quotas are strictly enforced, expanding the total supply of fisheries products in the short run. In the long run, the world fisheries resource stock may be reduced. Length: 21 pages Creation-Date: 2011-10 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-11-004.pdf File-Format: application/pdf Keywords: fisheries, subsidies, WTO, SCM Agreement, variable labor supply Classification-JEL: F13, F18, Q22, Q27 Handle: RePEc:kue:dpaper:E-11-004 Template-Type: ReDIF-Paper 1.0 Title: Noisy Information, Distance and Law of One Price Dynamics Across US Cities Author-Name: Mario J. Crucini Author-Name-First: Mario Author-Name-Last: Crucini Author-Name: Mototsugu Shintani Author-Name-First: Mototsugu Author-Name-Last: Shintani Author-Name: Takayuki Tsuruga Author-Name-First: Takayuki Author-Name-Last: Tsuruga Abstract: Using micro price data across US cities, we provide evidence that both the volatility and persistence of deviations from the law of one price (LOP) are positively correlated with the distance between cities. A standard, two-city, equilibrium model with time- varying technology under homogeneous information can predict the relationship between the volatility and distance but not between the persistence and distance. To account for the latter fact, we augment the standard model with noisy signals about the state of nominal aggregate demand that are asymmetric across cities. We further establish that the interaction of imperfect information and sticky prices improves the fi…t of the model. Length: 38 pages Creation-Date: 2010-10 Revision-Date: 2012-01 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-11-005.pdf File-Format: application/pdf Classification-JEL: E31, F31, D40 Keywords: Real exchange rates, Law of one price, Relative prices, Trade cost Handle: RePEc:kue:dpaper:E-11-005 Template-Type: ReDIF-Paper 1.0 Title: The Effect of Regional Trade Agreements on Technology Spillovers through International Trade Author-Name: Naoto Jinji Author-Name-First: Naoto Author-Name-Last: Jinji Author-Name: Xingyuan Zhang Author-Name-First: Xingyuan Author-Name-Last: Zhang Author-Name: Shoji Haruna Author-Name-First: Shoji Author-Name-Last: Haruna Abstract: We investigate empirically how regional integration affects technology spillovers among trade partners. We measure the extent of technology spillovers by using patent citation data from the United States Patent and Trademark Office. Our main finding, from employing the gravity model, is that technology spillovers between trade partners are higher if these countries are signatories to the same regional free trade agreement. This suggests that regional integration has a positive effect on technology spillovers. Another finding is that the GATT/WTO has a positive effect on technology spillovers among member countries. Length: 20 pages Creation-Date: 2012-02 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-11-006.pdf File-Format: application/pdf Classification-JEL: F15, O33 Keywords: regional trade agreement, technology spillovers, patent citations, gravity model Handle: RePEc:kue:dpaper:E-11-006 Template-Type: ReDIF-Paper 1.0 Title: Directed technical change, unilateral actions, and climate change Author-Name: Hiroaki Sakamoto Author-Name-First: Hiroaki Author-Name-Last: Sakamoto Abstract: In this paper, I investigate the implications of policy-induced technological change based on a multi-region variant of the directed technical change model developed by Acemoglu et al. (2012). On top of the pollution externality accompanied by carbon dioxide emission, different regions are connected through a global market where energy-related machine producing firms monopolistically compete with each other. One of the main findings of the analysis is that unilaterally introduced climate policies in developed regions might have only a slight short-term impact at a global level, but later will turn out to be a basis for low-carbon development in developing regions as well as developed regions. The simulation results indicate that an extension of the Kyoto protocol, if appropriately designed, can trigger a long-term shift in energy use at a global level even without active involvement of the United States. Moreover, if the United States decides to join the treaty and a fairly moderate abatement target is agreed upon among the member states, the similar level of long-term environmental consequence as in the universal climate regime can be replicated without explicit participation of developing regions. Length: 30 pages Creation-Date: 2012-02 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-11-007.pdf File-Format: application/pdf Classification-JEL: O31, O33, Q54, Q55, Q58 Keywords: Climate change, directed technical change, unilateral policy, innovation, Kyoto protocol Handle: RePEc:kue:dpaper:E-11-007 Template-Type: ReDIF-Paper 1.0 Title: Firm Productivity and Foreign Direct Investment in the Services Sector: A Firm-Level Analysis using Japanese Data Author-Name: Ayumu Tanaka Author-Name-First: Ayumu Author-Name-Last: Tanaka Abstract: Using Japanese firm-level data, I examine whether multinational enterprises (MNEs) are more productive than non-MNEs in the services sector. I employ the Kolmogorov-Smirnov (KS) test to compare the overall distribution of productivity by multinational status. The results indicate that MNEs tend to be more productive than non-MNEs in the services sector and suggest that the standard firm heterogeneity model can well explain foreign direct investment (FDI) by firms in the services sector. Length: 20 pages Creation-Date: 2012-02 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-11-008.pdf File-Format: application/pdf Classification-JEL: F1, F23, L8 Keywords: Services sector, Firm heterogeneity, Multinationals, Foreign direct investment Handle: RePEc:kue:dpaper:E-11-008 Template-Type: ReDIF-Paper 1.0 Title: The Causal Effects of Exporting on Domestic Workers:A Firm-Level Analysis using Japanese Data Author-Name: Ayumu Tanaka Author-Name-First: Ayumu Author-Name-Last: Tanaka Abstract: Japan has experienced rapid growth of non-regular workers under the globalization in 2000s. This study seeks to identify the causal effects of exporting on growth of labor and growth of the share of non-regular workers in Japanese manufacturing and wholesale sectors, using an extensive firm-level data. I employ propensity score matching technique and investigate whether firms that start exporting experience higher growth of labor and higher growth of the share of non-regular workers than non-exporters. I find positive effects of exporting on labor growth in manufacturing but I find little evidence for the effects on the share of non-regular workers in both sectors. Length: 24 pages Creation-Date: 2012-02 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-11-009.pdf File-Format: application/pdf Classification-JEL: F16, J31, L81 Keywords: exporting, non-regular workers, firm heterogeneity Handle: RePEc:kue:dpaper:E-11-009 Template-Type: ReDIF-Paper 1.0 Title: Impatience and Immediacy: A Quasi-Hyperbolic Discounting Approach to Smoking Behavior Author-Name: Takanori Ida Author-Name-First: Takanori Author-Name-Last: Ida Abstract: This paper investigates smoking status, including nicotine dependence, on the basis of a quasi-hyperbolic discounting approach. This approach reconciles the traditional rational addiction model and the bounded rational addiction model. The paper measures two key parameters: impatience, in line with the former model, and immediacy, in line with the latter model. There are two main conclusions. First, the impatience and immediacy parameters are positively associated with smoking probability. Second, they are positively associated with nicotine dependence. Length: 32 pages Creation-Date: 2012-02 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-11-010.pdf File-Format: application/pdf Classification-JEL: D81, D91, I12 Keywords: smoking, nicotine dependence, time preference, impatience, immediacy Handle: RePEc:kue:dpaper:E-11-010 Template-Type: ReDIF-Paper 1.0 Title: Keys to Smart Home Diffusion: A Stated Preference Analysis of Smart Meters, Photovoltaic Generation, and Electric/Hybrid Vehicles Author-Name: Takanori Ida Author-Name-First: Takanori Author-Name-Last: Ida Author-Name: Kayo Murakami Author-Name-First: Kayo Author-Name-Last: Murakami Author-Name: Makoto Tanaka Author-Name-First: Makoto Author-Name-Last: Tanaka Abstract: As expectations have risen about the deployment of smart grids, it is important to investigate the diffusion process of smart equipment such as smart meters, photovoltaic generation, and electric/hybrid vehicles. However, since the revealed preference data have not been accumulated for smart equipment diffusion, this paper conducts a conjoint analysis to examine consumers’ stated preferences on the basis of an online survey administered in March 2011. A mixed logit model that allows for individual heterogeneity is adopted for estimation, and willingness-to-pay values are calculated for the attributes. Furthermore, the rates of diffusion, the reduction of greenhouse gas emissions, and interdependencies among types of smart equipment are investigated. Length: 53 pages Creation-Date: 2012-02 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-11-011.pdf File-Format: application/pdf Classification-JEL: O33, Q48, Q51 Keywords: smart grid, smart meter, smart home, electric vehicle, conjoint analysis Handle: RePEc:kue:dpaper:E-11-011 Template-Type: ReDIF-Paper 1.0 Title: Effects of Large-Scale Research Funding Programs:A Japanese Case Study Author-Name: Takanori Ida Author-Name-First: Takanori Author-Name-Last: Ida Author-Name: Naomi Fukuzawa Author-Name-First: Naomi Author-Name-Last: Fukuzawa Abstract: This study investigates the effects of large-scale research funding from the Japanese government on the research outcomes of university researchers. To evaluate the effects, we use the difference-in-differences estimator and measure research outcomes in terms of number of papers and citation counts per paper. Our analysis shows that the funding program led to an increase in the number of papers in some fields and an increase in the citation counts in the other fields. A comparison of our estimation results with assessment data obtained from peer reviews showed important differences. Since the characteristics of research vary according to the field, bibliometrics analysis should be used along with the peer review method for a more accurate analysis of research impact. Length: 33 pages Creation-Date: 2012-02 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-11-012.pdf File-Format: application/pdf Keywords: Research assessment, Difference-in-differences, Government grants, University research, Bibliometrics, Peer review Handle: RePEc:kue:dpaper:E-11-012 Template-Type: ReDIF-Paper 1.0 Title: On the Short-run Relationship between the Income Distribution- and Finance-Growth Regimes Author-Name: Hiroshi Nishi Author-Name-First: Hiroshi Author-Name-Last: Nishi Abstract: This paper examines the short-run relationship between the income distributionand finance-growth regimes using a simple post-Keynesian demand-driven model. While each mechanism of wage-led and profit-led growth has been revealed, its relationship with debt-led and debt-burdened growth, and vice versa, is yet to be clarified. This is because the argument on these growth regimes has been developed separately. By constructing a simple post-Keynesian model that generates these regimes, this paper examines their relationship. It is shown that the growth regimes transform as the regime switching parameters in the IS balance change. By way of theoretical analysis, this paper presents some important implications for the diversity of economic growth—including the complementarity of growth regimes to shocks—that are in contrast to the implications of the basic neo-classical model on income distribution and money. In addition, by doing so, this paper also validates recent empirical results. Length: 30 pages Creation-Date: 2012-04 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-12-001.pdf File-Format: application/pdf Classification-JEL: E12, E22, O42, P24 Keywords: Wage- and Profit-led Growth, Debt-led and Debt-burdened Growth, Post-Keynesian model Handle: RePEc:kue:dpaper:E-12-001 Template-Type: ReDIF-Paper 1.0 Title: Bank Overleverage and Macroeconomic Fragility Author-Name: Ryo Kato Author-Name-First: Ryo Author-Name-Last: Kato Author-Name: Takayuki Tsuruga Author-Name-First: Takayuki Author-Name-Last: Tsuruga Abstract: This paper develops a dynamic general equilibrium model that explicitly includes a banking sector engaged in a maturity mismatch. We demonstrate that rational competitive banks take on excessive risks systemically, resulting in overleverage and ine¢ ciently high crisis probabilities. The model accounts for the bank’s seemingly over-optimistic outlook about their own solvency and the asset prices, compared to the social optimum. The result calls for policy intervention to reduce the high crisis probabilities. To this end, the government can commit to bailing out banks through public supply of liquidity or a low-interest rate policy. As opposed to the intention of the government, however, expectations of a bailout could incentivize banks to be even more overleveraged, leaving the economy exposed to higher crisis probabilities. Length: 60 pages Creation-Date: 2012-04 Revision-Date: 2013-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-12-002.pdf File-Format: application/pdf Classification-JEL: E3, G01, G21 Keywords: Financial crisis, Liquidity shortage, Maturity mismatch, Credit externalities, Financial regulation Handle: RePEc:kue:dpaper:E-12-002 Template-Type: ReDIF-Paper 1.0 Title: The Macroeconomic Effects of the Wage Gap between Regular and Non-Regular Employment and Minimum Wages Author-Name: Hiroaki Sasaki Author-Name-First: Hiroaki Author-Name-Last: Sasaki Author-Name: Jun Matsuyama Author-Name-First: Jun Author-Name-Last: Matsuyama Author-Name: Kazumitsu Sako Author-Name-First: Kazumitsu Author-Name-Last: Sako Abstract: We analyze the effect of the wage gap between regular and non-regular employment on a macroeconomy by using a Keynesian dynamic model. If the steady state equilibrium exhibits the stagnationist regime, the size of the reserve army effect affects the stability of the equilibrium. On the other hand, if the steady state equilibrium exhibits the exhilarationist regime, an increase in the wage gap destabilizes the equilibrium. The introduction of the minimum wage is desirable in that it mitigates fluctuations of business cycles. However, the introduction of an inappropriate minimum wage policy leads to the real wage and employment rate that are lower than the steady state values. Length: 24 pages Creation-Date: 2012-05 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-12-003.pdf File-Format: application/pdf Classification-JEL: E12, E24, E25, E32, J31, J83 Keywords: wage gap, regular and non-regular employment, minimum wage, demandled growth model Handle: RePEc:kue:dpaper:E-12-003 Template-Type: ReDIF-Paper 1.0 Title: Income Inequality in Chile: 1990-2006 Author-Name: Alain Hourton Author-Name-First: Alain Author-Name-Last: Hourton Abstract: The entrance of Chile to the Organization for the Economic Cooperation and Development, as the first South American country and second after Mexico in Latin America, sets a landmark in the development path that since the beginning of the 1990s decade has seemed to lead this country to a privileged position in the region. Given the reforms taken by the military regime in the 1980s, Chile is one of the most market-oriented countries in Latin America, with Free Trade Agreements and Economical Partnerships with several countries, including Japan, the United States and China. Nonetheless, Chile’s economic success is said to exclusively benefit a few Chileans; this is true, given the deep inequalities in the distribution of wealth. The income inequality existing in Chile is a long-term phenomenon; it tended to increase from 1974 to 1987 and decrease from 1987. This paper focuses on the evolution of the inequality from 1992 to 2006, and investigates the reasons for the decreasing trend in income inequality. First, we show that monetary transfers focused on low-income households contributed to decreasing inequality in after-tax income. Next, causes for the decrease in inequality in before-tax income are analyzed using log variance decomposition method based on the ageing hypothesis, Skilled biased-technological change and spreading higher education hypothesis. The analysis based on ageing hypothesis shows that the reduction of income inequality between age groups greatly contributed to decreasing in total income inequality. The spreading of higher education did not have the results expected, and surprisingly has a negative effect by increasing inequality; this could be because this popularization of higher education benefits mostly richer sectors of the population. The SBTC theory is also tested, resulting in signs of a possible inverse effect. A possible explanation could be the rise in the demand of unskilled workers through globalization and the Foreign Direct Investment in sectors using unskilled labor force. Length: 28 pages Creation-Date: 2012-05 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-12-004.pdf File-Format: application/pdf Classification-JEL: D30,D63,O15 Keywords: Income Inequality, Chile, Skilled-biased Technological Change Theory Handle: RePEc:kue:dpaper:E-12-004 Template-Type: ReDIF-Paper 1.0 Title: International Competition and Distributive Class Conflict in an Open Economy Kaleckian Model Author-Name: Hiroaki Sasaki Author-Name-First: Hiroaki Author-Name-Last: Sasaki Author-Name: Ryunosuke Sonoda Author-Name-First: Ryunosuke Author-Name-Last: Sonoda Author-Name: Shinya Fujita Author-Name-First: Shinya Author-Name-Last: Fujita Abstract: This paper constructs an open economy Kaleckian model in which the international competition affects the bargaining process between firms and workers, and investigates the effect of such bargaining on macroeconomy. If the real exchange rate has little impact on the trade balance, the economy is stable, whereas if it has a larger impact on the trade balance, the economy is unstable. Moreover, we show that the effect of a change in the bargaining power on aggregate demand depends not only on the demand regimes but also on which agent bears the burden arising from the international price competition. Length: 33 pages Creation-Date: 2012-07 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-12-005.pdf File-Format: application/pdf Classification-JEL: E12, F43, J50 Keywords: Kaleckian model, Open economy, International price competition, Wage bargaining Handle: RePEc:kue:dpaper:E-12-005 Template-Type: ReDIF-Paper 1.0 Title: Trade Patterns and Non-Scale Growth between Two Countries Author-Name: Hiroaki Sasaki Author-Name-First: Hiroaki Author-Name-Last: Sasaki Abstract: This paper builds a two-country, two-sector (manufacturing and agriculture), non-scale growth model and investigates the relationship between trade patterns and the growth rate of per capita real consumption. If the population growth rate of the home country is higher than that of the foreign country, the following results are obtained. (1) Under autarky, the growth rate of per capita real consumption is higher in the home country than in the foreign country. (2) Under free trade, if the home country completely specializes in manufacturing and the foreign country asymptotically completely specializes in agriculture, then the growth rate of the foreign country is higher than that of the home country, though this trade pattern is not sustainable in the long run. (3) Under free trade, if the home country produces both goods and the foreign country asymptotically completely specializes in agriculture, then the growth rates of the home country and the foreign country are equal, and this trade pattern is sustainable in the long run. Length: 26 pages Creation-Date: 2012-08 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-12-006.pdf File-Format: application/pdf Classification-JEL: F10, F43, O11, O41 Keywords: non-scale growth model; trade patterns; population growth; per capita growth Handle: RePEc:kue:dpaper:E-12-006 Template-Type: ReDIF-Paper 1.0 Title: Income Distribution, Debt Accumulation, and Financial Fragility in a Kaleckian Model with Labor Supply Constraints Author-Name: Hiroaki Sasaki Author-Name-First: Hiroaki Author-Name-Last: Sasaki Author-Name: Shinya Fujita Author-Name-First: Shinya Author-Name-Last: Fujita Abstract: This paper investigates the effect of changes in the retention ratio, profit share, interest rate, and natural rate of growth on the rate of capital accumulation and the financial structure of firms by using a Kaleckian growth model with labor supply constraints. We show that if the economy exhibits a debt-burdened regime, depending on certain conditions, there could be cyclical fluctuations such that the financial structure of firms changes periodically from speculative finance to Ponzi finance. Length: 34 pages Creation-Date: 2012-09 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-12-007.pdf File-Format: application/pdf Classification-JEL: E12, E21, E22, E32, E44 Keywords: Financial structure, labor supply constraints, Kaleckian model, cyclical fluctuations Handle: RePEc:kue:dpaper:E-12-007 Template-Type: ReDIF-Paper 1.0 Title: Varieties of Economic Growth Regimes, Types of Macroeconomic Policies, and Policy Regime: A Post-Keynesian Analysis Author-Name: Hiroshi Nishi Author-Name-First: Hiroshi Author-Name-Last: Nishi Abstract: This study explores the effects of macroeconomic policies on measures of macroeconomic performance such as growth and inflation by setting up a dynamic post-Keynesian model with government and central bank interventions. In doing so, this study reconsiders the arguments in favor of a policy regime. The model in this paper generates several varieties of economic growth regimes and inflation dynamics. The economic growth regimes are defined by the relationship between economic growth, the income distribution, and government debt finance. In this paper, the income distribution-growth regimes are the wage-led and profit-led growth regimes. The debt-growth regimes are the debt-led and debt-burdened growth regimes. Moreover, the inflation dynamics are derived from the institutional configuration of the labor market. Specifically, the relevant labor market institutions are the bargaining position of workers and employment security. In this setting, this paper reconsiders the discussion of the policy regime. According to Adam Przeworski, a policy regime is defined as an equilibrium in which policies are similar across different parties. To examine whether such a political constellation has a favorable effect on macroeconomic performance, this paper considers macroeconomic policies based on different types of monetary and fiscal policy rules. Specifically, this paper compares three types of post-Keynesian interest rate policy rules, the Smithin rule, the Pasinetti rule, and the Kansas City rule. Using a theoretical analysis, this paper reveals that these interest rate policy rules and fiscal policies have different impacts on inflation and the economic growth rate. Moreover, this result has an important implication for the discussion of the policy regime. If the policy regime is defined as an equilibrium in which policies are similar across different parties, such a regime may not always improve macroeconomic performance. A macroeconomic policy should be compatible with the type of growth regime and inflation dynamics. An economic policy may be effective under one economic growth regime but not under another, so always sticking to the same policy may not produce optimal results. This implication questions the desirability of a policy regime. This paper concludes that there is no one best policy for growth and inflation and that a policymaker should choose economic policies by considering the economic growth regime. In this sense, the economic growth regime and the policy regime are interdependent. Length: 45 pages Creation-Date: 2012-11 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-12-008.pdf File-Format: application/pdf Classification-JEL: E12, E43, E52, P24 Keywords: Economic Growth Regime, Policy Regime, Post-Keynesian Model Handle: RePEc:kue:dpaper:E-12-008 Template-Type: ReDIF-Paper 1.0 Title: International Trade and Industrialization with Negative Population Growth Author-Name: Hiroaki Sasaki Author-Name-First: Hiroaki Author-Name-Last: Sasaki Abstract: This paper builds a small-open-economy, non-scale-growth model with negative population growth and investigates the relationship between trade patterns and per capita consumption growth. Under free trade, if the population growth rate is negative and its absolute value is small, the home country becomes an agricultural country. Then, the long-run growth rate of per capita consumption is positive and depends on the world population growth rate. On other hand, if the population growth rate is negative and its absolute value is large, the home country becomes a manufacturing country. Then, the long-run growth rate of per capita consumption is positive and depends on both the home country and the world population growth rate. Moreover, the home country is better off under free trade than under autarky in terms of per capita consumption growth irrespective of whether the population growth is positive or negative. Length: 17 pages Creation-Date: 2012-12 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-12-009.pdf File-Format: application/pdf Classification-JEL: F10, F43, O11, O41 Keywords: non-scale-growth model; negative population growth; trade patterns; per capita growth Handle: RePEc:kue:dpaper:E-12-009 Template-Type: ReDIF-Paper 1.0 Title: Do Regional Trade Agreements Enhance International Technology Spillovers? Author-Name: Naoto Jinji Author-Name-First: Naoto Author-Name-Last: Jinji Author-Name: Xingyuan Zhang Author-Name-First: Xingyuan Author-Name-Last: Zhang Author-Name: Shoji Haruna Author-Name-First: Shoji Author-Name-Last: Haruna Abstract: We examine whether regional trade agreements (RTAs) enhance international technology spillovers by using a panel of patent application and citation data for 142 countries/regions during 1990–2006 at the United States Patent and Trademark Office. We use patent citation data as a proxy for technology spillovers. A gravity-like model is estimated by the negative binomial model and the fixed effects negative binomial (FXNB) model. We find that technology spillovers between two countries/regions measured by patent citations are greater if they are signatories to the same RTA. This finding is quite robust for different estimation techniques. The estimated results from the FXNB model suggest that there is no significant difference in the effects of free trade agreements and customs unions on technology spillovers. We also find that General Agreement on Tariffs and Trade (GATT) and World Trade Organization (WTO) membership and participation in the Information Technology Agreement of WTO facilitate technology spillovers across signatories. Length: 26 pages Creation-Date: 2013-01 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-12-010.pdf File-Format: application/pdf Classification-JEL: F15, O33 Keywords: regional trade agreement, technology spillovers, patent citations, economic distance, gravity model Handle: RePEc:kue:dpaper:E-12-010 Template-Type: ReDIF-Paper 1.0 Title: Comparative Statics for Oligopoly: A Generalized Result Author-Name: Naoto Jinji Author-Name-First: Naoto Author-Name-Last: Jinji Abstract: We perform comparative statics for a general model of asymmetric oligopoly and derive a concise formula for the response of one firm to a marginal change in its rival’s strategic variable, taking into account the responses of all other firms. We obtain the conditions under which the sign of this response coincides with that of the mixed second-order partial derivative of the firm’s payoff function. We then propose a distinction between gross and net strategic relationships (i.e., strategic substitute and complement). Length: 15 pages Creation-Date: 2013-01 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-12-011.pdf File-Format: application/pdf Classification-JEL: L13, D43, C62 Keywords: comparative statics, asymmetry, stability conditions Handle: RePEc:kue:dpaper:E-12-011 Template-Type: ReDIF-Paper 1.0 Title: A dynamic common-property resource problem with potential regime shifts Author-Name: Hiro Sakamoto Author-Name-First: Hiro Author-Name-Last: Sakamoto Abstract: This paper provides a general framework with which a dynamic problem with potential regime shifts can be analyzed in a strategic environment as well as from social planner’s perspective. A typical situation described by such a game is the joint exploitation of a common-property resource such as lakes, forests, marine fish populations, and at a larger scale the global climate system. By applying the framework to a simple dynamic common-property resource problem, we show that when the risk is endogenous, potential of regime shifts can facilitate precautionary management of common-property resources even in a strategic environment. It is also shown that there exists a resource-depletion trap in which a regime shift, once it happens, triggers a reversal of resource accumulation dynamics, possibly leading to a collapse of resource base. Length: 26 pages Creation-Date: 2013-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-12-012.pdf File-Format: application/pdf Classification-JEL: C72, C73, Q20 Keywords: Regime shift, Markov-perfect Nash equilibrium, common-property resource, tragedy of the commons Handle: RePEc:kue:dpaper:E-12-012 Template-Type: ReDIF-Paper 1.0 Title: Geographic Concentration of Foreign Visitors to Japan Author-Name: Ayumu Tanaka Author-Name-First: Ayumu Author-Name-Last: Tanaka Abstract: This paper provides the first evidence of geographic concentration of foreign visitors in Japan, using a new data on nights spent by foreign visitors in each region. Using locational Gini coefficients, I show that foreign visitors are more geographically concentrated than Japanese visitors and the level of geographical concentration vary across source countries. In addition, I employ gravity equations to examine the determinants of nights spent by foreign visitors in each prefecture. The results suggest that visa policy, transport infrastructure, and natural and cultural factors, as well as traditional gravity variables such as distance and economic size, play a role in international travel to Japanese prefectures. Length: 17 pages Creation-Date: 2013-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-12-013.pdf File-Format: application/pdf Classification-JEL: F14, L83, R12 Keywords: foreign visitors, geographic concentration, locational Gini coefficient, gravity equation Handle: RePEc:kue:dpaper:E-12-013 Template-Type: ReDIF-Paper 1.0 Title: Prudential Capital Controls: The Impact of Different Collateral Constraint Assumptions Author-Name: Mitsuru Katagiri Author-Name-First: Mitsuru Author-Name-Last: Katagiri Author-Name: Ryo Kato Author-Name-First: Ryo Author-Name-Last: Kato Author-Name: Takayuki Tsuruga Author-Name-First: Takayuki Author-Name-Last: Tsuruga Abstract: A fast-growing literature on small open economy models with pecuniary external- ities has provided the theoretical grounds for the policy analysis of macro-prudential regulations and bailouts. Benigno, Chen, Otrok, Rebucci, and Young (2012a) recently showed that the macro-prudential regulations are desirable if the policy instrument is restricted to capital controls. Using the framework of Jeanne and Korinek (2010), we show that this result depends on the functional form of the collateral constraint which households are faced with. If households collateralize their assets that they purchase at the same time as their borrowing, capital controls in the form of bailout subsidy during crises can be optimal because they can achieve the …rst best allocation. If, on the other hand, the maximum borrowing is constrained by their assets that they have purchased before they borrow, a stronger case can be made for ex ante macro- prudential regulations. Length: 17 pages Creation-Date: 2013-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-12-014.pdf File-Format: application/pdf Classification-JEL: E32, G01, G18 Keywords: Financial crises, Credit externalities, Bailouts, Macroprudential policies Handle: RePEc:kue:dpaper:E-12-014 Template-Type: ReDIF-Paper 1.0 Title: An Analysis of CDS Market Liquidity by the Hawkes Process Author-Name: Masahiko Egami Author-Name-First: Masahiko Author-Name-Last: Egami Author-Name: Yasuyuki Kato Author-Name-First: Yasuyuki Author-Name-Last: Kato Author-Name: Tomochika Sawaki Author-Name-First: Tomochika Author-Name-Last: Sawaki Abstract: We study the credit default swap (CDS) markets in the U.S. and Japan, focusing on bid-ask spreads which are closely related to the liquidity of the markets. Since bid-ask spreads dramatically surged during the financial crisis (2008-2009) and the market became very illiquid, it is crucially important to investigate how bid-ask spreads fluctuate. In this paper, not only do we make dynamic analysis of the bid-ask spreads in both countries but propose a model to predict bid-ask spreads via the self-exciting intensity process (the Hawkes process). Length: 35 pages Creation-Date: 2013-06 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-13-001.pdf File-Format: application/pdf Classification-JEL: G10, G17, G21 Keywords: CDS contract, liquidity, bid-ask spread, the Hawkes process, self-exciting processes, financial crisis, credit risk Handle: RePEc:kue:dpaper:E-13-001 Template-Type: ReDIF-Paper 1.0 Title: An Empirical Analysis of the Relationship Between Individual Characteristics and Research Productivity: Relationship Between Experience as Practical Physician and Productivity Author-Name: Naomi Fukuzawa Author-Name-First: Naomi Author-Name-Last: Fukuzawa Abstract: This paper provides an analysis of the relationship between research performance and individual characteristics (e.g., career path information) of researchers, based on information provided in the Curriculum Vitaes (CVs) of 565 excellent researchers within the life sciences and medical sciences fields in Japan. I specifically analyzed the relationship between the experiences of practical physicians and research performance. As a result, I found that the experience as a practical physician had a statistically positive relationship with the number of research papers, but there was not a significant relationship with the number of citations. Moreover, the diversity of a researcher’s career related significantly to the number of citations and patents. An employment experience at a young age with a company or independent administrative agency had a significant and positive relationship with number of coauthors. However, a significant relationship between work experience in a foreign country and research performance was not observed. Length: 23 pages Creation-Date: 2013-07 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-13-002.pdf File-Format: application/pdf Keywords: Research productivity, Curriculum Vitae, Career path, Practical physician, Diversity of career, Research grant Handle: RePEc:kue:dpaper:E-13-002 Template-Type: ReDIF-Paper 1.0 Title: The Delayed Effects of Monetary Shocks in a Two-sector New Keynesian Model Author-Name: Munechika Katayama Author-Name-First: Munechika Author-Name-Last: Katayama Author-Name: Kwang Hwan Kim Author-Name-First: Kwang Hwan Author-Name-Last: Kim Abstract: This paper studies a two-sector New Keynesian model that captures the hump-shaped response of non-durable and durable spending to a monetary shock when non-durable prices are sticky and durable goods are flexibly priced. Based on the estimated parameters, we show that habit formation and investment adjustment costs are not sucient to generate the gradual response of non-durable and durable spending in this setup. We find that nominal wage rigidity and non-separable preferences between consumption and labor are also necessary to delay the peak response of non-durable and durable spending in the estimated two-sector New Keynesian model. Length: 32 pages Creation-Date: 2013-08 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-13-003.pdf File-Format: application/pdf Classification-JEL: E21, E30, E31, E32 Keywords: Sticky Prices, Sticky Wages, Non-Separable Preferences, Two-sector New Keynesian Model Handle: RePEc:kue:dpaper:E-13-003 Template-Type: ReDIF-Paper 1.0 Title: Positive and Negative Population Growth and Long-Run Trade Patterns: A Non-Scale Growth Model Author-Name: Hiroaki Sasaki Author-Name-First: Hiroaki Author-Name-Last: Sasaki Abstract: This paper builds a two-country, two-sector, non-scale growth model and investigates the relationship between trade patterns and the growth rate of per capita real consumption. We consider negative population growth as well as positive population growth. We show that, as long as the population growth rates of the two countries are different, if the country that accumulates capital stock has negative population growth, no trade patterns are sustainable in the long run. This is true irrespective of the population growth rate of the other country. Moreover, we show that, if the country that accumulates capital stock has positive population growth, two trade patterns are sustainable in the long run. In this case, either each country's per capita growth is determined by the population growth of the capital-accumulating country or the population growth of both countries, depending on which of the two trade patterns is realized. Length: 28 pages Creation-Date: 2013-10 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-13-004.pdf File-Format: application/pdf Classification-JEL: F10, F43, O11, O41 Keywords: positive/negative population growth, trade patterns, non-scale growth model Handle: RePEc:kue:dpaper:E-13-004 Template-Type: ReDIF-Paper 1.0 Title: A Multi-Sectoral Balance-of-Payments-Constrained Growth Model with Sectoral Heterogeneity:International Competition, Productivity Dynamics, and Economic Growth Author-Name: Hiroshi Nishi Author-Name-First: Hiroshi Author-Name-Last: Nishi Abstract: This study builds a multi-sectoral balance-of-payments constrained growth model that incorporates some structural heterogeneity between sectors and countries, such as differences in labor productivity, price competition, share of exports and imports, and the quality of commodities. The model in the current paper generates more comprehensive results than Thirlwall (1979), Blecker (1998), and Araujo and Lima (2007), even though it contains their properties and reproduces their implications. Furthermore, as compared with these existing works, the current model sheds more light on the relationship between trade structure, international competition, productivity dynamics, and economic growth. It also shows an example of the fallacy of composition that there are differences between microeconomic and macroeconomic phenomena, by illustrating how changes in nominal wage, the Kaldor– Verdoorn effect, and the degree of market competition in both countries affect the economic growth of the home country. Length: 28 pages Creation-Date: 2014-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-13-005.pdf File-Format: application/pdf Classification-JEL: F12,O19 Keywords: Multi-sectoral Thirlwall’s law, International competition, Structural heterogeneity Handle: RePEc:kue:dpaper:E-13-005 Template-Type: ReDIF-Paper 1.0 Title:Regional Trade Agreements with Labor Clauses: Effects on Labor Standards and Trade Author-Name:Isao Kamatai Author-Name-First:Isao Author-Name-Last:Kamata Abstract: An increasing number of regional trade agreements (RTAs) include “labor clauses” that require or urge the signatory countries to commit to maintaining a certain level of labor standards. This paper, starting by classifying more than 200 currently effective RTAs depending on the nature and extent of labor provisions, empirically analyzes the effect of a RTA with labor clauses on domestic labor conditions in the signatory countries as well as the effect on trade growth between the countries, using data for up to 220 countries for the years 1995 through 2012. The study finds that (i) intensive trade with the partner(s) of a labor-clause-inclusive RTA may have a positive impact on labor earnings that concentrate on middle-income countries; but also that (ii) labor clauses may reduce the trade-promoting effect of the RTA for the middle-income countries, especially when the RTA partner is a high-income country. These results offer a policy implication that the inclusion of labor clauses in a trade agreement should involve non-negligible costs for possible benefits that may not be expected for every country. Length: 47 pages Creation-Date: 2014-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-13-007.pdf File-Format: application/pdf Classification-JEL:F13, F14, F16, F66, J81, J83 Keywords:International trade, Regional trade agreements, Labor standards, Labor clauses Handle: RePEc:kue:dpaper:E-13-007 Template-Type: ReDIF-Paper 1.0 Title:The Impact of Multinationals’ Overseas Expansion on Employment at Suppliers at Home: New Evidence from Firm-Level Transaction Relationship Data for Japan Author-Name:Keiko Ito Author-Name-First:Keiko Author-Name-Last:Ito Author-Name:Ayumu Tanaka Author-Name-First:Ayumu Author-Name-Last:Tanaka Abstract: This paper focuses on non-internationalized supplier firms and investigates how the expansion of overseas activities by their main customer firms affects their employment, utilizing a unique dataset that includes information on buyer-supplier transaction relationships for Japanese manufacturing firms for the period 1998-2007. We do not find any negative effect of top buyers’ overseas expansion on domestic suppliers’ employment.􀀁 Instead, we find a significant positive effect. Our result implies that, contrary to fears of a potential hollowing out of domestic supporting industries, the expansion of overseas activities of customer firms has a positive impact on suppliers’ employment. Expansion of overseas production by downstream firms may increase purchases from upstream firms in Japan and this would be the case if downstream firms can increase their world-wide sales by expanding overseas production. Therefore, our result suggests that having a transaction relationship with successful downstream multinational firms that expand their global sales through overseas production is important for non-internationalized suppliers in Japan. Length: 47 pages Creation-Date: 2014-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-13-008.pdf File-Format: application/pdf Classification-JEL:F23, F14, F16, F61, J23 Keywords:Labor demand; Supplier firms; Multinational enterprises; Transaction relationships; Japan. Handle: RePEc:kue:dpaper:E-13-008 Template-Type: ReDIF-Paper 1.0 Title:Effects of Commodity Price Shocks on Inflation: A Cross Country Analysis Author-Name:Atsushi Sekine Author-Name-First:Atsushi Author-Name-Last:Sekine Author-Name:Takayuki Tsuruga Author-Name-First:Takayuki Author-Name-Last:Tsuruga Abstract: Using local projections, this paper investigates e ects of commodity price shocks on in ation. We estimate impulse responses of the consumer price indexes (CPIs) to a commodity price shock, based on a monthly panel consisting of 120 countries. Our results from the local projections suggest that the CPIs are almost fully adjusted within a year in response to a commodity price shock and thus e ects of commodity price shocks are transitory. We then explore the possibility that the responses of the CPIs may be dependent on the in ation regimes. Based on the smooth transition autoregressive models that use the past in ation rate as a transition variable, we nd that commodity price shocks have more persistent e ects on in ation in the low in ation regime than in the high in ation regime. Our analysis also shows that, in the high in ation regime, there are (i) stabilizing roles of the exchange rate on consumer prices; and (ii) large di erences in price responses between developed and developing countries. However, these e ects are not detected in the low in ation regime. Our ndings suggest that business cycle factors may play an important role in understanding e ects of commodity price shocks on the CPIs. Length: 33 pages Creation-Date: 2014-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-13-006.pdf File-Format: application/pdf Classification-JEL:E31; E37; Q43 Keywords:Labor demand; Commodity prices, in ation, pass-through, local projections, smooth transition autoregressive models Handle: RePEc:kue:dpaper:E-13-006 Template-Type: ReDIF-Paper 1.0 Title:Public Bads, Heterogeneous Beliefs, and the Value of Information Author-Name:Hiroaki Sakamoto Author-Name-First:Hiroaki Author-Name-Last:Sakamoto Abstract: This paper develops a simple model of public bads where players have heterogeneous beliefs about the consequence of their collective action. Properties of equilibrium and its relation to beliefs and preference are examined, followed by a detailed investigation of the impacts of new information. Our analysis sheds light on an important trade-off associated with information policies in the presence of belief heterogeneity and ambiguity. In particular, we show that newly available information can unambiguously worsen the free-riding problem even when it better reflects the correct risk than the players’ beliefs. Adding information noise will never mitigate the public-bad nature of the problem if players are equally confident about their beliefs. When the beliefs are highly heterogeneous, however, a certain amount of information noise can be Pareto-improving, for which the degrees of risk and ambiguity aversion play asymmetric roles. Length: 48 pages Creation-Date: 2014-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-13-009.pdf File-Format: application/pdf Classification-JEL:C72, D80, D81, Q54, H23 Keywords:externality; uncertainty; heterogeneous beliefs; information Handle: RePEc:kue:dpaper:E-13-009 Template-Type: ReDIF-Paper 1.0 Title:Focused Information Criterion for Series Estimation in Partially Linear Models Author-Name:Naoya Sueishi Author-Name-First:Naoya Author-Name-Last:Sueishi Author-Name:Arihiro Yoshimura Author-Name-First:Arihiro Author-Name-Last:Yoshimura Abstract: This paper proposes a focused information criterion (FIC) for variable selection in partially linear models. Our criterion is designed to select an optimal model for estimating a focus parameter, which is a parameter of interest. We estimate the model by the series method and jointly select the variables in the linear part and the series length in the nonparametric part. A Monte Carlo simulation shows that the proposed FIC successfully selects the model that has a relatively small mean squared error of the estimator for the focus parameter. Length: 11 pages Creation-Date: 2014-04 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-001.pdf File-Format: application/pdf Classification-JEL:C14, C52, C53 Handle: RePEc:kue:dpaper:E-14-001 Template-Type: ReDIF-Paper 1.0 Title:The change of correlation structure across industries:an analysis in the regime-switching framework Author-Name:Masahiko Egami Author-Name-First:Masahiko Author-Name-Last:Egami Author-Name:Yuki Shigeta Author-Name-First:Yuki Author-Name-Last:Shigeta Author-Name:Katsutoshi Wakai Author-Name-First:Katsutoshi Author-Name-Last:Wakai Abstract: This paper studies changes of correlation structure across industries in the United States equities market in the regime-switching framework. To capture the irreversible structural change and to separate it from the recurring boomingrecession switches, we introduce two Markov chains. We empirically identify the timing of the structural change and confirm that, after the change, the asset return correlations across industries increased. Moreover, the impact of the structural change on correlations is stronger in a recession period than in a booming period. Length: 30 pages Creation-Date: 2014-04 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-002.pdf File-Format: application/pdf Classification-JEL:C22, G10 Handle: RePEc:kue:dpaper:E-14-002 Template-Type: ReDIF-Paper 1.0 Title:Inner Conflict between Nuclear Power Generation and Electricity Rates: A Japanese Case Study Author-Name:Takanori Ida Author-Name-First:Takanori Author-Name-Last:Ida Author-Name:Kosuke Takemura Author-Name-First:Kosuke Author-Name-Last:Takemura Author-Name:Masayuki Sato Author-Name-First:Masayuki Author-Name-Last:Sato Abstract: Since the March 11 earthquake, Japanese households have been facing a trade-off problem between decreasing dependency on nuclear power generation and avoiding an increase in electricity rates. We analyze this inner conflict quantitatively, adopting two economic-psychological approaches: First, we note that the trade-off causes cognitive dissonance after making a choice that results in a wider desirability gap between the chosen alternative and the rejected alternative. Second, the consumer surplus improves by 11.2% with a no-choice option for suspending judgment in the presence of cognitive dissonance. Third, individual characteristics such as gender and annual household income are significantly correlated with both cognitive dissonance and a preference for the no-choice option. Length: 30 pages Creation-Date: 2014-04 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-003.pdf File-Format: application/pdf Classification-JEL:D3, D12, L94, Q41 Handle: RePEc:kue:dpaper:E-14-003 Template-Type: ReDIF-Paper 1.0 Title:Fairness Ideals, Hidden Selfishness and Opportunist Behavior:An Experimental Approach Author-Name:Natsuka Tokumaru Author-Name-First:Natsuka Author-Name-Last:Tokumaru Abstract:Economic experiments have shown that human incentives are not only limited to the profit-maximizing principle but also motivated by fairness. Those studies presuppose that individuals commit to fixed value systems and that experimental institutions invoke fairness ideals. This paper shows that participants strategically select fairness ideals advantageous for self-distribution. Participants whose relative earnings are higher than those of their pairs adhere to a liberalist fairness ideal, whereas those with lower relative earnings prefer an egalitarian distribution of money. This reflects that individuals commit opportunistic behavior as a result of resolving a cognitive dissonance between material utility and fairness. Keywords: Economic Experiment, Fairness Ideals, Cognitive Dissonance, Hidden Selfishness, Opportunistic Behavior Economic experiments have shown that human incentives are not only limited to the profit-maximizing principle but also motivated by fairness. Those studies presuppose that individuals commit to fixed value systems and that experimental institutions invoke fairness ideals. This paper shows that participants strategically select fairness ideals advantageous for self-distribution. Participants whose relative earnings are higher than those of their pairs adhere to a liberalist fairness ideal, whereas those with lower relative earnings prefer an egalitarian distribution of money. This reflects that individuals commit opportunistic behavior as a result of resolving a cognitive dissonance between material utility and fairness. Length: 18 pages Creation-Date: 2014-04 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-004.pdf File-Format: application/pdf Keywords:Economic Experiment, Fairness Ideals, Cognitive Dissonance, Hidden Selfishness, Opportunistic Behavior Handle: RePEc:kue:dpaper:E-14-004 Template-Type: ReDIF-Paper 1.0 Title:Structural Changes in the Labor Market and Social Security System in China:From the Viewpoint of Flexicurity Author-Name:YAN Chengnan Author-Name-First:Chengnan Author-Name-Last:YAN Abstract:The global financial crisis triggered by the subprime mortgage crisis in the United States in 2008 revealed the unsustainability of China’s export-led growth regime, which supported the country’s rapid economic growth for over 20 years. Today, the Chinese economy has been forced to break away from export-led growth. Furthermore, the large financial investment made to compensate for the decreased export demand has helped China maintain high economic growth after the effects of the financial crisis started to wane in 2011. Thus, in recent years, the Chinese economy has had to transition from export- and investment -led growth to consumption-led growth. In this paper, we analyze the most important factors promoting the change from export- and investment-led growth to consumption-led growth in China’s economic growth regime. That is, we examine the correlation between the recent structural changes in the reproduction of labor force in the labor market and the social security system. Especially, we focus on the changes in the income-labor nexus due to labor market reforms and the present state of the Chinese social security system from the view point of flexicurity, which increases flexibility and security simultaneously. Length: 29 pages Creation-Date: 2014-05 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-005.pdf File-Format: application/pdf Classification-JEL:J21, J24, O43, P11, P36 Keywords:Growth regime, Export-led, Consumption-led, Flexicurity, Social security Handle: RePEc:kue:dpaper:E-14-005 Template-Type: ReDIF-Paper 1.0 Title:Science linkages focused on star scientists in the life and medical sciences: The case of Japan Author-Name:Naomi Fukuzawa Author-Name-First:Naomi Author-Name-Last:Fukuzawa Author-Name:Takanori Ida Author-Name-First:Takanori Author-Name-Last:Ida Abstract:We analyze the distributions of paper-paper and paper-patent citations and estimate the relationship between them, based on a sample of 4,763 published papers for which the corresponding authors were among the top 100 researchers in the life and medical sciences in Japan. We find that paper-paper citations peak at an average of 4 years after the publication of a paper, while the corresponding lag for paper-patent citations is 6 years. Although there is a time lag before papers can be put to practical use, this lag has shortened in recent years. Moreover, the quality of a paper is important for being cited by a patent, and a paper’s quality increases the number of paper-patent citations. In addition, we show that an inverse U-shaped relationship exists between the amount of research grant funding and research quality, and we can derive the efficient amount of research grant funding that maximizes research quality. We find that the relationship between research quality and the total number of papers written by the researcher(s) is U-shaped, and we derive the number of papers that minimizes research quality Length: 22 pages Creation-Date: 2014-08 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-006.pdf File-Format: application/pdf Classification-JEL: Keywords:Science linkages, Non-patent references, Technology transfer Handle: RePEc:kue:dpaper:E-14-006 Template-Type: ReDIF-Paper 1.0 Title:Is Growth Declining in the Service Economy? Author-Name:Hiroaki Sasaki Author-Name-First:Hiroaki Author-Name-Last:Sasaki Abstract:This study extends Baumol's (1967) two-sector (manufacturing and services) unbalanced growth model to analyze a situation in which, first, services are used for both final consumption and intermediate inputs into manufacturing production, and second, the productivities of the manufacturing and services sectors endogenously evolve. By using this model, we examine the conditions under which the employment share of services increases over time and investigate how the economic growth rate evolves as a result. Our results are summarized as follows. First, if the human capital accumulation function exhibits constant returns to scale with respect to per capita consumption of services, then we obtain a U-shaped relationship between the employment share of services and the economic growth rate. Second, if the human capital accumulation function exhibits decreasing returns to scale with respect to per capita consumption of services, the economic growth rate decreases first, begins to increase after some time, again decreases, and finally, approaches zero. Length: 22 pages Creation-Date: 2014-09 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-007.pdf File-Format: application/pdf Classification-JEL:J21; J24; O11; O14; O30; O41 Keywords:service economy; economic growth; endogenous productivity growth; business services Handle: RePEc:kue:dpaper:E-14-007 Template-Type: ReDIF-Paper 1.0 Title:What is ‘Fair’ Distribution under Collaboration?:Evidences from Lab-Experiments Author-Name:Natsuka Tokumaru Author-Name-First:Natsuka Author-Name-Last:Tokumaru Author-Name:Hiroyuki Uni Author-Name-First:Hiroyuki Author-Name-Last:Uni Abstract: Length: 16 pages Creation-Date: 2014-09 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-008.pdf File-Format: application/pdf Classification-JEL: Keywords: Handle: RePEc:kue:dpaper:E-14-008 Template-Type: ReDIF-Paper 1.0 Title:Price and Nominal Wage Phillips Curves and the Dynamics of Distribution in Japan Author-Name:Ryunosuke Sonoda Author-Name-First:Ryunosuke Author-Name-Last:Sonoda Abstract:This study estimates two types of Phillips curves––the price Phillips curve and nominal wage Phillips curve––for the Japanese economy and analyses the institutional structure of the dynamics of effective demand and income distribution in each period from 1977 to 2007. The estimated results allow us to make the following four findings. First, the Japanese economy was a profit-led regime and a counter-cyclical wage share regime until the 1990s. Second, although the combination of regimes can make the dynamics of effective demand and income distribution unstable, such dynamics were actually stable until the 1980s because wage share was sufficiently regulated by labour–management cooperation. Third, however, during the 1990s, the dynamics became unstable, because this regulation mechanism was weakened by a proportional increase in non-regular workers who were not members of labour unions. Finally, after the 2000s, the dynamics restabilized because Japanese firms quickened their speeds of employment adjustment and the distributive regime in Japan switched from a counter-cyclical wage share one to a pro-cyclical wage share regime. Length: 32 pages Creation-Date: 2014-09 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-009.pdf File-Format: application/pdf Classification-JEL:E12; J53 Keywords:price Phillips curve, nominal wage Phillips curve, income distribution, demand regime, Kaleckian model Handle: RePEc:kue:dpaper:E-14-009 Template-Type: ReDIF-Paper 1.0 Title:A Field Experiment on Dynamic Electricity Pricing in Los Alamos:Opt-in Versus Opt-out Author-Name:Takanori Ida Author-Name-First:Takanori Author-Name-Last:Ida Author-Name:Wenjie Wang Author-Name-First:Wenjie Author-Name-Last: Wang Abstract:We use a field experiment to examine how consumers respond to distinct combinations of default options (opt-in versus opt-out) and framing of economic incentives (gain versus loss). A randomized controlled trial (RCT) is implemented to investigate the demand reduction performance of three dynamic electricity pricing programs - opt-in critical peak pricing (CPP, incentive framed as loss), opt-out CPP, and opt-out peak time rebate (PTR, incentive framed as gain). We find that the opt-in customer enrollment rate is much higher than those documented in the literature are; our subjects’ high education levels and technology related experiences may have contributed largely to the mitigation of the opt-in default effect. In addition, we obtain precise estimates of the average treatment effects, with the treatment effect being most pronounced for customers assigned to the opt-in CPP group. This result is largely attributable to the high opt-in CPP enrollment rate and to the customer inertia generated by opt-out procedures. Furthermore, an “option to quit” effect is found among PTR customers. This finding is consistent with a growing behavioral literature highlighting that incentives framed as losses loom larger than those framed as gains. Creation-Date: 2014-09 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-010.pdf File-Format: application/pdf Classification-JEL: C23; C93; D03; Q41 Keywords:Field Experiment, Behavioral Economics, Framing, Default Effect, Dynamic Elec- tricity Pricing. Handle: RePEc:kue:dpaper:E-14-010 Template-Type: ReDIF-Paper 1.0 Title:Income Distribution and Economic Growth in a Multi-Sectoral Kaleckian Model Author-Name:Hiroshi Nishi Author-Name-First:Hiroshi Author-Name-Last:Nishi Abstract:This study builds an income distribution and growth model within a simple multi-sectoral Kaleckian framework. The model has heterogeneous features in each sector in that the responses of saving and investment to changes in macroeconomic performance differ sectorally, and there are also different sectoral shares of saving and investment. We consider the determinants that establish the economic growth regime (i.e. wage-led and profit-led) and the stable output growth rate adjustment within this framework. By doing so, we reveal the sectoral composition of saving and investment and that elasticity of saving and investment matter for the formation of a growth regime and the stability of the output growth rate at the aggregate level. Length: 25 pages Creation-Date: 2014-10 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-011.pdf File-Format: application/pdf Classification-JEL:B50, E12, O41 Keywords:Multi-sectoral Kaleckian model; Income distribution; Sectoral heterogeneity Handle: RePEc:kue:dpaper:E-14-011 Template-Type: ReDIF-Paper 1.0 Title:The Division of Labor within Firms, Optimal Entry, and Firm Productivity Author-Name:Koji Shintaku Author-Name-First:Koji Author-Name-Last:Shintaku Abstract:Constructing an intra-industry trade model with division of labor within firms, this paper shows that opening up to trade improves firm productivity. Firms choose the number of markets they export. Optimal entry conditions for export markets rule out loss from opening up to trade. Under fixed export costs, opening up to trade makes some firms exit and concentrates labor to surviving firms through recruiting process and induces the division of labor. An increase in the number of markets induces firms to enter more export markets and improves firm productivity in the long run and has the reverse effect on firm productivity in the short run. Length: 40 pages Creation-Date: 2014-12 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-012.pdf File-Format: application/pdf Classification-JEL:F12 Keywords:the division of labor within firms; firm productivity; the optimal number of markets firms enter; fixed export costs Handle: RePEc:kue:dpaper:E-14-012 Template-Type: ReDIF-Paper 1.0 Title:An Analysis of J.R. Commons’s Changing Views on the Role of Sovereignty in the Political Economy Author-Name:Kota Kitagawa Author-Name-First:Kota Author-Name-Last:Kitagawa Abstract:This article distills the economic and current significance contained in the political economy of J.R. Commons. It compares descriptions of his three main works that discuss “sovereignty”: A Sociological View of Sovereignty (SVS), Legal Foundations of Capitalism (LFC), and Institutional Economics (IE). Through this comparison, we find that the role of sovereignty in his theory changed dramatically. First, in the period from SVS (1899–1900) to LFC (1924), the theory of sovereignty changes significantly from the standpoint of natural rights, which imply permanence of privileged customs, to “pragmatic philosophy” of the courts, in which laws are relevant to customs at certain times and places. Second, from the manuscripts of IE (1927–1928), sovereignty is defined as comprising part principles, which relate to each other and make up the whole principle, willingness. In other words, Commons views sovereignty as one perspective, which in turn has a high capability of explaining the socioeconomic system. Additional descriptions of IE (1934) derived from its original manuscripts repeatedly emphasize the “power” of economic concerns that are equal to or exceed the power of the state, as well as the importance of the “function” of sovereignty in pragmatic investigations of economic disputes. We distill the economic and current significance of IE. First, the value theory that constructs values institutionally and collectively starts from an analysis of sovereignty and joint evaluations. Second, sovereignty cannot be separated from an analysis of economic transactions. Third, this paper concretely shows elements of a “deliberate space” in which sovereignty and economic interests act in concert. J.R. Commons’s IE sets out specific knowledge on the interface between sovereignty and economic interests, and serves as a useful tool in reconsidering the organ of sovereignty. Length: 33 pages Creation-Date: 2014-12 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-013.pdf File-Format: application/pdf Classification-JEL:160; B110 Keywords:J.R. Commons; Institutional Economics; Sovereignty; Supreme Court; Commission Handle: RePEc:kue:dpaper:E-14-013 Template-Type: ReDIF-Paper 1.0 Title:The Effects of Emission Taxes on Pollution through the Diffusion of Clean Technology:The Presence of Green Consumers Author-Name:Wenjun Sun Author-Name-First:Wenjun Author-Name-Last:Sun Author-Name:Naoto Jinji Author-Name-First:Naoto Author-Name-Last:Jinji Abstract:We analyze how the implementation of an emission tax influences aggregate pollution through the diffusion of a new, less polluting technology. Our focus is on how the consumption behavior of green consumers changes the relationship between policy stringency and the equilibrium state of technology diffusion or the ranking of the states of technology diffusion (i.e., full, partial, and no diffusion) in terms of aggregate pollution. We find that emission taxes should not be too high for an “efficient full-diffusion equilibrium” to emerge, in which the full diffusion of the new technology occurs in equilibrium and attains the lowest level of aggregate pollution. If the emission tax is high, aggregate pollution may be lowest in the no diffusion scenario. In addition, the presence of green consumers narrows the range of emission taxes and degree of the new technology that leads to the efficient full-diffusion equilibrium and widens the range of parameters for which aggregate pollution is lowest in the no diffusion case. Length: 30 pages Creation-Date: 2014-12 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-014.pdf File-Format: application/pdf Classification-JEL:Q55; Q58; H23; L13 Keywords:technology diffusion; emission taxes; green consumers Handle: RePEc:kue:dpaper:E-14-014 Template-Type: ReDIF-Paper 1.0 Title:General statutory minimum wage debate in Germany: Degrees of political intervention in collective bargaining autonomy Author-Name:Kota Kitagawa Author-Name-First:Kota Author-Name-Last:Kitagawa Author-Name:Arata Uemura Author-Name-First:Arata Author-Name-Last:Uemura Abstract:This article traces the pattern of conflict, collaboration, and compromise among trade unions, employers, political parties, executive branches, and economic research institutes in Germany, all of which have different stances regarding the introduction of a general statutory minimum wage there. This article examines the degree of political intervention in collective bargaining autonomy. First, it identifies the factors that bring about differences in stance. Second, it addresses the issue of actor independence—in particular, that of service trade unions—despite the placing of institutional factors, to establish a reference standard for the debate behind forming social movement alliances. Third, it examines the manner in which the policy’s economic legitimacy is earned. We conclude that the emergence of a statutory minimum wage in Germany reflects the dynamic mix of postwar political practices in its own context with the effects of modern neoliberal economic policies. Length: 39 pages Creation-Date: 2015-01 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-015.pdf File-Format: application/pdf Classification-JEL: J08; J58; K31 Keywords:Minimum Wage, Collective Bargaining Autonomy, Germany, Coalition Agreement, Social Movement Unionism, Varieties of Capitalism Handle: RePEc:kue:dpaper:E-14-015 Template-Type: ReDIF-Paper 1.0 Title:Optimal Rules of Origin with Asymmetric Compliance Costs under International Duopoly Author-Name:Naoto Jinji Author-Name-First:Naoto Author-Name-Last:Jinji Author-Name:Yoshihiro Mizoguchi Author-Name-First:Yoshihiro Author-Name-Last:Mizoguchi Abstract:We examine the optimal rules of origin (ROO) in a free trade area/agreement (FTA). We incorporate compliance costs of the ROO into the model. In particular, compliance costs are higher for a firm located in a non-member country of the FTA than for a firm located in an FTA member country, whereas marginal production costs are lower for the former. An importing country within the FTA imposes tariffs on imports that do not comply with the ROO. We show that the optimal ROO may have a protectionist bias or cause low utilization of FTAs depending on parameter values. Length: 28 pages Creation-Date: 2015-02 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-016.pdf File-Format: application/pdf Classification-JEL: F12; F15 Keywords:free trade area/agreement; rules of origin; compliance costs; oligopoly; double rent-shifting Handle: RePEc:kue:dpaper:E-14-016 Template-Type: ReDIF-Paper 1.0 Title:Demand and Income Distribution in a Two-Country Kaleckian Model Author-Name:Hiroaki Sasaki Author-Name-First:Hiroaki Author-Name-Last:Sasaki Author-Name:Shinya Fujita Author-Name-First:Shinya Author-Name-Last: Fujita Abstract:This study builds a two-country Kaleckian model and investigates the effect of one country’s economic policy on both countries. In contrast to preceding studies, we consider monetary aspects as well as real aspects. Our results show that the effects on output of an increase in the nominal wage rate and in the mark-up rate differ from the results obtained from one-country Kaleckian models. Moreover, we show that the success of monetary easing in one country may depend on the other country’s policy, implying the need for policy coordination between the two countries. Length: 28 pages Creation-Date: 2015-02 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-017.pdf File-Format: application/pdf Classification-JEL: E12; E41; E52; F31; F41; F42 Keywords:two-country Kaleckian model; income distribution; monetary policy Handle: RePEc:kue:dpaper:E-14-017 Template-Type: ReDIF-Paper 1.0 Title:Differences in Wage-Determination Systems between Regular and Non-Regular Employment in a Kaleckian Model Author-Name:Ryunosuke Sonoda Author-Name-First:Ryunosuke Author-Name-Last: Sonoda Author-Name:Hiroaki Sasaki Author-Name-First:Hiroaki Author-Name-Last:Sasaki Abstract:In this study, we build a Kaleckian model incorporating institutional differences between the wage determination of regular employment and that of non-regular employment. Using this model, we investigate how an employment shift toward regular workers affects the capacity utilization rate and income distribution. Our results show that while such shift in employment decreases the capacity utilization rate and increases the wage share of regular workers, it either increases or decreases the wage share of non-regular workers. An increase in the flexibility of the labor market, as seen in an employment shift toward non-regular workers, increases the amplitude of business cycles. However, the introduction of a minimum wage fornon-regular workers stabilizes the economy. Length: 28 pages Creation-Date: 2015-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-018.pdf File-Format: application/pdf Classification-JEL: E12; E25; J31 Keywords:wage gap; regular and non-regular employment; demand-led growth model Handle: RePEc:kue:dpaper:E-14-018 Template-Type: ReDIF-Paper 1.0 Title:Labor Clauses in Regional Trade Agreements and Effects on Labor Conditions: An Empirical Analysis Author-Name:Isao Kamata Author-Name-First:Isao Author-Name-Last: Kamata Abstract:his paper attempts to perform an empirical analysis of the effects of “labor clauses” provided in bilateral or plurilateral trade agreements (or regional trade agreements: RTAs) on working conditions that laborers in the RTA signatory countries actually face, using macro-level data for a wide variety of countries. The paper first reexamines the labor-provision classification of 223 RTAs in force proposed in the author’s other study (Kamata, 2014) by reviewing the texts of a selected set of those RTAs, and re-defines “RTAs with labor clauses” according to two criteria: (i) the agreement urges or expects the signatory countries to harmonize their domestic labor standards with internationally recognized standards, and (ii) the agreement stipulates the procedures for consultations and/or dispute settlement on labor-condition issues between the signatory countries. Based on this RTA labor-clause (re-)classification, this paper then estimates the impacts of a country’s trade intensities with partners of RTAs with labor clauses and of those without on four measured working conditions in the country: average earnings, average work hours, fatal occupational injury rate, and the number of the ILO’s fundamental conventions ratified. The empirical result indicates that RTAs with labor clauses do not differ from RTAs without labor clauses in the direction of their impacts (improving or worsening) on actual working conditions, and trade intensity with RTA partners should not have a statistically significant impact on the country’s working conditions regardless of whether or not those RTAs include labor clauses. It, however, may be premature to conclude that RTA labor clauses are not effective, since there should be some technical issues inherent in the method and data employed in the current study. Length: 84 pages Creation-Date: 2015-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-019.pdf File-Format: application/pdf Classification-JEL: F13, F14, F16, F66, J81, J88 Keywords:wage gap; International trade, Regional trade agreements, Labor standards, Labor clauses Handle: RePEc:kue:dpaper:E-14-019 Template-Type: ReDIF-Paper 1.0 Title:Value-driven responsibility accounting - dynamic tensions generated by competing values embedded in the management control system Author-Name:Norio Sawabe Author-Name-First:Norio Author-Name-Last:Sawabe Abstract:This paper explores the way dynamic tensions are created by the management control system (MCS) at the lower management level in the context of a more flexible mode of management. Using Simons’ levers of control (LOC) framework, we adopt a case study method to investigate the way in which core values affect the design and use of a responsibility accounting system, which in turn shape the challenges which operational managers face, and how such managers fulfil their responsibilities by delivering financial results while at the same time being faithful to the organisation’s core values. Contrary to the existing literature, which argues that internal consistency of core values is required in order to create dynamic tensions, we find that dynamic tensions are created by competing elements of the core values, which are embedded in various facets of the responsibility accounting system. This paper contributes to the extant literature on dynamic tensions first by demonstrating how competing elements of core values affect the design and use of a responsibility accounting system; second by illuminating how these competing values are enacted in the practice of the MCS at the lower management level; third by illustrating a more nuanced understanding of dynamic tensions by showing the relative and multi-directional forces exerted by the MCS; and finally by adding another type of inherent tension that MCS should manage to those between efficiency and flexibility, that is, inherent tensions between community values and market concerns. Length: 63 pages Creation-Date: 2015-03 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-020.pdf File-Format: application/pdf Classification-JEL: Keywords:levers of control; dynamic tensions; responsibility accounting system; core values; competing values Handle: RePEc:kue:dpaper:E-14-020 Template-Type: ReDIF-Paper 1.0 Title:Structural Change and Transformation of Growth Regime in the Japanese Economy Author-Name:Hiroshi Nishi Author-Name-First:Nishi Author-Name-Last: Hiroshi Abstract:The purpose of this study is to empirically examine the relationship between structural change and economic growth in Japan during the past 40 years. While using the growth in real value added and labour productivity as measurement of economic growth, we consider the structural change in value added as the structural change in output and that in capital and labour as the structural change in inputs. Specifically, we use the Japan Industrial Productivity database 2014 compiled by the Research Institute of Economy, Trade and Industry, and show (1) the pace of structural change in inputs and output, (2) the evolution of sectoral dispersion of economic growth, (3) the changing distribution of sectoral contribution to aggregate economic growth, and (4) empirical evidence of the relationship between structural change and economic growth. Our main conclusion is that the Japanese growth regime has transformed from a heterogeneity decreased regime with overall growth process to a heterogeneity increased one with uneven growth process since the 1990s; the impact that structural change in output had on economic growth was positive, although its magnitude has weakened since then. Length: 45 pages Creation-Date: 2015-04 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-15-001.pdf File-Format: application/pdf Classification-JEL: B50, E12, L16, O41 Keywords:wage gap; Growth regime, Sectoral heterogeneity, Structural change, Japanese economy Handle: RePEc:kue:dpaper:E-15-001 Template-Type: ReDIF-Paper 1.0 Title:Fair Shares between Worker and Investor:Economic Experiments on Functional Income Distribution Author-Name:Natsuka Tokumaru Author-Name-First:Natsuka Author-Name-Last:Tokumaru Author-Name:Hiroyuki Uni Author-Name-First:Hiroyuki Author-Name-Last:Uni Abstract:Declines in labor wage rate accompanied with increases in dividend or stocks are worldwide tendencies since 1980s that designates significant change in functional income distribution between capital and labor. Whereas some empirical studies in macro-level analyzes these changes are caused by institutional changes in recent decades such as financialization, studies on micro-level analysis on functional income distributions are few. However, how workers and investors consider distribution justice may have significant importance for explaining recent changes in functional distribution. If both of workers and investors contributed to a production process in different ways, what is ‘fair’ share for each of them? In this paper we have performed economic experiments, consisting of investment stage, production stage and distribution stage and examined fairness ideals in functional income distribution. In our experiment each subject is pair-matched to constitute a two-player’s team consisting of a worker and an investor. After investment stage by an investor and production stage by a worker, each team member was required to give a proposal to separate a team earning with one’s pair. We have performed two different treatments: a) with-labor treatment in which investors are required to work to earn investment funds; b) without-labor treatment in which investment funds are given to investors as their endowments. We have classified each subject’s distribution proposal into three fairness ideals: selfish; libertarian; and radical egalitarian, and examined what factors are significant for subject’s distribution justice. Our findings are threefold. 1) First, few libertarian-marginalist, who believes one should ‘get according to their production by production measurements they own’ was observed. 2) Second, labor value theory seems to have more impact on fairness ideals of individuals: in with-labor treatment investors have to work for their investment funds, both of investors and workers tend to be unselfish, whereas in without-labor treatment investors do not need to work, both of investors and workers tend to be selfish. 3) Third, investors have significant tendencies to commit libertarian egalitarian, that enable them to hold their rest investment funds as their asset, whereas workers have significant tendencies to adhere radical-egalitarian, that enable them to redistribute investor’s assets. These tendencies may be understood from self-serving bias that both of workers and investors have. Although a difference between libertarian-egalitarian and radical-egalitarian distributions seems to be not so serious for finding a compromise, however, in the case investors’ capitals do not based on their labors, a discrepancy in distribution between workers and investors seems to be created. Our experimental results may partly explain recent declines in labor-wage accompanied with institutional changes: financialization tend to make investors to adhere more selfish distribution whereas weakened collective bargaining power by unions promote those tendencies. Length: 26 pages Creation-Date: 2015-04 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-15-002.pdf File-Format: application/pdf Classification-JEL: D33, C91, C92 Keywords:Functional Income Distribution, Fairness Ideals, Economic Experiments Handle: RePEc:kue:dpaper:E-15-002 Template-Type: ReDIF-Paper 1.0 Title:Egalitarianism Policy and Effective Demand under Globalization Author-Name:Taro Abe Author-Name-First:Taro Author-Name-Last:Abe Abstract:The study examines egalitarianism policies in terms of the relationship between la- bor and capital and extends the model developed by the economist Bowles. We intro- duce the demand factor to the Bowles model (2012), which discussed the effectiveness of the income and asset redistribution policies in a global economy. The improvement of productivity and the decrease in the ratio of monitoring labor through asset-based redistribution increase the real wage rate because of its lure for foreign capital. At this point in the Bowles model, the labor supply increases and then employment increases. In contrast, in our model, with the addition of the demand factor, the improvement of productivity increases employment, but the decrease in monitoring labor does not always increase employment as both demand and supply increase. This means that asset-based redistribution in a global economy is not always effective. Length: 14 pages Creation-Date: 2015-06 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-15-003.pdf File-Format: application/pdf Classification-JEL: E12, F60, J80, J88 Keywords:Egalitarianism, Redistribution, Effective Demand, Globalization Handle: RePEc:kue:dpaper:E-15-003 Template-Type: ReDIF-Paper 1.0 Title:Political-Security, Economy, and Culture within the Dynamics of Geopolitics and Migration: On Philippine Territory and the Filipino People Author-Name:John X. LAMBINO Author-Name-First:John X Author-Name-Last:LAMBINO Abstract:The paper considers the interaction of the dual elements of the nation-state: territory and people. Particularly, it discusses the interaction of geopolitics and migration, i.e. the non-mobile territory and the mobile people, from the perspectives of political-security, economy, and culture, and how the interactions influence government policy focusing on the case of the Philippines.The paper ferrets-out the major factors in the geopolitical transformation of the Philippine Is-lands into the westernmost frontier of the United States, and how this geopolitical transformation created a migratory linkage from the Philippine Islands to the United States. The paper shows how migratory movements shaped the geopolitics of East Asia or Western Pacific before World War II by pointing out the following. One: The westward expansion of the American people ini-tially changed the geopolitical conditions in the American continent, and eventually changed the geopolitical make-up in the Western Pacific. Two: The migration of Filipinos to the United States was a key factor in the granting of Philippine independence, thereby reshaping the geopo-litical conditions in the Western Pacific region.The paper shows that the geopolitical transformation of the Philippine Islands came with the im-plantation of American culture and English language. The paper discusses how this cultural as-pect has functioned in terms of a migratory linkage by looking at the current migratory pattern of Filipinos. The paper then shows how the economic agreement the Philippines signed with the United States in 1946 to attain independence eventually led to the establishment of a migratory system as the Philippine government adopted of a labor export policy in the 1970s. The paper further shows the importance of remittances from overseas Filipinos to the Philippine economy.The paper elaborates and discusses how the political-security policies undertaken by the Philip-pines have been deeply influenced by both its geopolitical circumstance and the current situation of Filipino migration. Finally, the paper points out that the large presence of Filipinos overseas and the country’s dependence to their remittances are a cause of weakness for the Philippine state in maintaining a credible foreign and security policy. Length: 29 pages Creation-Date: 2015-08 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-15-004.pdf File-Format: application/pdf Classification-JEL: J61 F51 F52 Keywords:Geopolitics in East Asia; Filipino Migration; Nation-state Handle: RePEc:kue:dpaper:E-15-004 Template-Type: ReDIF-Paper 1.0 Title:Mark-up Pricing, Sectoral Dynamics, and the Traverse Process in a Two-Sector Kaleckian Economy Author-Name:Shinya Fujita Author-Name-First:Shinya Author-Name-Last:Fujita Abstract:Kaleckian models, which study the relation between functional income distribution and demand formation, have focused on how macro-level distribution affects macro-level performance. In the real economy, however, labour–management negotiations are held at the industry level and thus the relation between sectoral distribution and sectoral/macroeconomic performance should be considered. This study presents a two-sector Kaleckian model with intermediate inputs and investigates how a distributive change in one sector affects sectoral/macroeconomic capacity utilization and capital accumulation. The results of the presented comparative static analysis and traverse analysis demonstrate that one sector’s change in the mark-up rate shifts each sector’s rate of capacity utilization in the opposite direction, while the impact of one sector’s change in the mark-up rate on performance differs by sector. The analyses also demonstrate that the effect of a change in the mark-up rate on capital accumulation depends on the firm’s animal spirits. Length: 33 pages Creation-Date: 2015-08 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-15-005.pdf File-Format: application/pdf Classification-JEL: E12, E22, O41 Keywords:Two-sector model, Mark-up pricing, Traverse analysis Handle: RePEc:kue:dpaper:E-15-005 Template-Type: ReDIF-Paper 1.0 Title:Electricity demand response in Japan:Experimental evidence from a residential photovoltaic generation system Author-Name:Takanori Ida Author-Name-First:Takanori Author-Name-Last:Ida Author-Name:Kayo Murakami Author-Name-First:Kayo Author-Name-Last: Murakami Author-Name:Makoto Tanaka Author-Name-First:Makoto Author-Name-Last:Tanaka Abstract: We report on a randomized controlled trial used to examine the effect of dynamic pricing when applied to households with rooftop photovoltaic (PV) power-generation systems. Using high-frequency data on household-level electricity use, PV generation, purchases, and sales, we find that critical peak pricing induced significant usage reductions of 3-4% among households with PV systems, a quarter of the effect size seen among average households without solar PV systems. In addition, we investigate the influence of the amount of PV power generated on treatment effects and the potential heterogeneity caused by participating households’ attributes. This is the first large-scale field experiment evaluating the demand response of households with PV generation capabilities. Length: 25 pages Creation-Date: 2015-08 File-URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-15-006.pdf File-Format: application/pdf Classification-JEL: D1, Q4 Keywords:randomized controlled trial, field experiment, photovoltaic generation, dynamic pricing Handle: RePEc:kue:dpaper:E-15-006