Kenji Kondoh (Chukyo University)
Pollution and International Migration"
Review of International Economics
We analyse the welfare effects
of international migration in the presence of
trans-boundary pollution. We
use a simplified Copeland and Taylor (1999)
model, where the (developed)
home countryfs pollution abatement technology
is superior to that of the (less
developed) foreign country. If there is no
trade, workers will migrate
from the foreign country to the home country.
The foreign country gains from
migration, but whether the home country gains
or not depends on the abatement-technology
gap and the magnitude of the
coefficient of trans-boundary
pollution. World welfare will increase under
migration. If there is free
trade in goods, international migration occurs
when the home country specializes
in the production of the environmentally
sensitive good. In this case,
migration will result in increased production
of the manufactured good and
increase the level of world pollution.
Noriko Ashiya (Meikai University)
of cartels facilitated by anti-dumping regulations"
Australian Economic Papers
This study formulates Prusa's
theory that anti-dumping regulations
facilitate the formation
of cartels between an exporter and
It demonstrates that interest rates and product
differentiation are two
key factors that may determine the robustness of
Naoto Jinji (Hitotsubashi
Labelling of Biotechnology Products in the Absence
of Quality Difference"
This paper examines the
strategic use of mandatory labelling of
such as genetically modified food. A foreign
dominant firm produces
a biotechnology product and foreign competitive
firms produce a conventional
one. It is shown that if other trade
measures such as tariffs
are also available, the government of an
importing country may impose
mandatory labelling even in the case where
there is no quality difference
between biotechnology and conventional
products. A combination
of a discriminatory tariff on the biotechnology
product and mandatory labelling
shifts rents from the foreign dominant
firm to the domestic economy.
Hiroshi Mukunoki (Gakushuin
"On the Optimal
External Tariffs of a Free Trade Area with Internal
Japan and the World Economy
Previous analyses of free
trade areas suggest that member countries
reduce external tariffs to
the level that improves welfare of non-member
countries. Using an oligopoly
model with product differentiation, this
paper shows that when a free
trade area entails endogenous change from
segmented to integrated markets
for internally produced goods, external
tariffs become strategic
complements and their equilibrium level is higher
than in the market segmentation
case. In this case, the non-member may
lose from the formation of
free trade area whereas each member gains
"A twin crisis
model with incomeplete information"
Fumiko Takeda and Katsumi
Journal of the Japanese
and International Economies
This paper presents a
model that highlights the connection between domestic
bank runs and currency
crises in a framework in which small depositors and a
large trader engage in
a simultaneous game. A long-term return on domestic
technology affects the
prospects of the bank and those of the domestic
currency in the same
direction. The presence of a large trader makes small
depositors more likely
to withdraw their money from the bank. The large
trader's influence on
the small traders is much larger, when he has more
precise information than
the small depositors.
pass-through and strategic pricing: Evidence from Japanese
imports of DRAMs"
This paper analyzes oligopolistic
rivalry among source countries to evaluate
the degree of exchange-rate
pass-through. The analysis of Japanese imports
of DRAMs also contributes
to the study of the pass-through of relatively
homogenous goods produced
in emerging countries, which has been analyzed in
very few papers. Comparison
between traditional OLS estimates, which take
behavior as exogenously given, and GMM estimates, which
fully endogenize the
rivals' pricing behavior, indicates the
misspecification in the
OLS estimates and the need to endogenize pricing
behavior. The results
also show that the degree of pass-through estimated by
GMM is lower than that
estimated by OLS, and that prices are strategic
complements between the
following pairs of countries; Korea and Taiwan,
Taiwan and Singapore,
and Singapore and the US.
and the Restriction of Trade in the Presence of Lobbying
Taiji Furusawa, Keisaku
Higashida and Jota Ishikawa
for the Environment"
This paper examines
how lobbying activity for protection of the environment
affects the pollution
and trade tax rates adopted by the government of a
large importing country.
We demonstrate that, under certain conditions on
the structure of demand
and supply, both the tax rates under lobbying are
than they would be in the absence of lobbying when the
determines them simultaneously. In addition, we consider
the effects of lobbying
activity on the terms of trade and domestic prices.
Quotas in the Presence of Imperfect Competition and
We consider trade policies
intended to affect the production of a foreign
monopolist that generates
negative externalities. We derive the optimal
tariff and optimal
import quota, and examine which policy measure should be
used to maximize domestic
welfare. We find that if the domestic government
does not have full
information on the foreign firm's production method and
if cross-border externalities
exist, import quotas are in some cases
preferable to tariffs.
Otherwise, however, tariffs are preferable to quotas.
Taichi Maki (Kyoto
Gakuen University), Koichi Yotsuya (Doshisha University),
and Tadashi Yagi (Doshisha University)
and the Riskiness of Investment in Firm-specific Skills"
Yasuhiro Takarada (Shobi-Gakuen
This paper develops
a simple growth model in which workers face risks to
their firm specific
skills, such as far-reaching changes in business and
or drastic technological innovations, and invest in
general skills to
prepare for these risks. This model demonstrates that, in
the presence of the
economy-wide positive externality of general skills,
in general skills exhibits a strategic complement, and
thus, a low-growth
trap may arise. Since a lower risk to firm-specific
skills decreases workersf
incentive to invest in general skills, multiple
and the amount of government subsidies for general
skill investment that
are required to remove the bad equilibrium increase.
"Foreign Aid, Tariff
Revenue, and Factor Adjustment Costs"
Japan and the World
Using a two-country
two-good model, we examine the welfare effects of foreign
aid that facilitates
factor movement between industries in the recipient
country. The government
of the donor country produces a public input, which the
is forced to purchase by spending aid as well as tariff
revenue. The recipient
uses the public input to convert one specific factor to
another. We show that
tied aid can benefit the recipient if the factor movement
is beneficial. Tied aid can make the donor better off when the recipient
imposes the import tariff.
Masao Yamada (Yamaguchi University)
and substitutability: A note"
Naoto Jinji (Hitotsubashi
Journal of Economic
Dynamics and Control
This paper analyzes
the relationship between industrialization and
technology in detail.
Three main conclusions are obtained:
(i) the crucial
factor for the existence of a poverty trap is the
degree of substitutability
among intermediate inputs;
(ii) the effects
of technological progress in the manufactured good
sector and the intermediate
goods sector on industrialization differ
with the degree
of substitutability among intermediate inputs;
progress in the manufactured good sector and
goods sector weakens the lock-in effect of historical
events while strengthening
the role of expectations.
These suggest that
the degree of substitutability among intermediate inputs
should be an important
factor when we plan a development strategy.
for Product R&D with Symmetric Costs"
This paper examines
strategic policy for product R&D in an international
duopoly where domestic
and foreign firms are identical. It is shown
R&D policy is described by a menu of subsidy schedule
contingent on firms'
quality choices. Unilateral policy enables its
domestic firm to
produce a high quality product, making equilibrium
With two active governments, in equilibrium they
subsidy schedules. Two equilibrium outcomes exist,
which are identical
except for the identity of the countries. Thus,
have an equal chance to become the high quality exporter.
Bertrand and Cournot
cases are both examined.
Jota Ishikawa (Hitotsubashi University)
Markets to Integrated Markets:
(Kwansei Gakuin University)
An Analysis of Economic Integration and Antidumping Legislation"
Review of International Economics
examines how a movement from segmented markets to integrated markets
affects the volume of trade, consumer prices, profits and welfare
in a monopoly model.
The monopolist can initially discriminate consumer prices among
markets with trade costs
but has to take arbitrage into account as economic integration
proceeds. The analysis provides
interesting insights into economic integration and antidumping
law. It is shown that the extent of
arbitrage and the shape of marginal cost curve play crucial roles.
Surprisingly, it is possible that
neither consumers nor the monopolist gains from economic integration,
and that antidumping
legislation benefits consumers at the expense of producers.
policy and endogenous quality choice"
Journal of Industrial Organization
In a quality-differentiated
duopoly where (i) quality is endogenously
production, (ii) fixed costs are increasing and convex in
(iii) variable production costs are insubstantial, an R&D
subsidy for the
firm producing a high-quality product improves social
of whether the ensuing product-market competition
is Bertrand or
Cournot, while an R&D subsidy for the firm producing a
improves social welfare only if Bertrand, and not if
Yin-Wong Cheung (University of California, Santa Cruz), Menzie
(University of California, Santa Cruz and NBER) and Eiji Fujii
(University of Tsukuba)
"China, Hong Kong,
and Taiwan: A Quantitative Assessment of Real and
The status of
real and financial integration of China, Hong Kong, and
Taiwan is investigated
using monthly data on one-month interbank rates,
and prices. Specifically, the degree of integration is
on the empirical validity of real interest parity,
parity, and relative purchasing power parity. There
these parity conditions tend to hold over longer periods,
do not hold instantaneously. Overall, the magnitude of
the parity conditions is shrinking over time. In
China and Hong Kong appear to have experienced significant
integration during the sample period. It is also found that
variability plays a major role in determining the
of deviations from these parity conditions.
Takumi Naito (Tokyo Institute of Technology)
untied aid with environmental externalities"
shows that even untied aid is Pareto-improving if and only if the
to consume the polluting good in the donor country is
larger than that in the recipient country.
Jota Ishikawa, Yongmin Chen and Zhihao Yu
and Strategic Outsourcing"
Taiji Furusawa and Keisaku Higashida
Journal of International Economics
This paper develops a model of strategic outsourcing.
liberalization in the intermediate-product market, a domestic
choose to purchase a key intermediate good from a more efficient
producer, who also competes with the domestic firm for a
final good. This
has a strategic effect on competition. Unlike the outsourcing
cost saving, the strategic outsourcing has a collusive effect
raise the prices of both intermediate and final goods. Trade
in the intermediate-good market could have a very different
with trade liberalization in the final-good market.
is Needed for Welfare-Enhancing Policies under
Japan and the World Economy
In the framework of international Cournot oligopoly,
welfare-enhancing policies when policymakers have only limited
on demand and cost structures. We show that even if policymakers
idea about costs and demand, they can raise welfare by introducing
production subsidy. If the government knows that demand is
not very convex,
a small tariff can be used to enhance welfare. With strategic
complements, a small
import reduction by an import quota deteriorates welfare while
increase in the number of domestic firms improves welfare.
In other cases,
some more information is required to determine right policies.