2011
Yukio
Karasawa-Ohtashiro and Akihiko Yanase
Asia-Pacific Journal of Accounting &
Economics
Akihiko
Yanase and Weijia Dong Asia-Pacific Journal of Accounting &
Economics
Takumi
Naito Journal of International Economics
Tsuyoshi
Toshimitsu Metroeconomica
Kenji
Fujiwara Economics Letters
Kenji Fujiwara and Ngo Van Long Dynamic
Games and Applications
Yasuhiro Takarada, Weijia
Dong, and Takeshi Ogawa Review of
International Economics
Kozo
Kiyota Journal
of International Economics
Takumi
Naito Japanese Economic Review
Kazuhiro
Takauchi Economics
Bulletin
Wanida Ngienthi, Yan
Ma, and Fumio Dei Review of International
Economics
Shigeto Kitano Journal of Macroeconomics
Kozo
Kiyota Review
of International Economics
Kozo
Kiyota Review
of World Economics
Kozo
Kiyota Contemporary
Economic Policy
Wolfgang
Eggert, Jun-ichi Itaya, and Kazuo Mino Journal
of Economic Behavior and Organization
Seiya Fujisaki and Kazuo Mino Economics Bulletin
Angus
C. Chu and Yuichi Furukawa Journal of
Economic Dynamics and Control
Akihiko
Yanase Journal
of Economic Dynamics and Control
Yoshinori
Kurokawa Economics
Letters
Kenji
Fujiwara Australian Economic Papers
Tetsuya
Saito Journal of Industrial Organization
Education
Jota
Ishikawa, Kazuharu Kiyono,
and Morihiro Yomogida Japanese Economic Review
Wanida Ngienthi and Fumio
Dei Review of International Economics
Yasushi
Kawabata Manchester School
Akihiko
Yanase FinanzArchiv
Masao
Oda and Koji Shimomura Review of International Economics
December
2011
Yukio
Karasawa-Ohtashiro (Nanzan
University) and Akihiko Yanase (Tohoku University)
gA Dynamic International Trade Model with Endogenous Fertilityh
Asia-Pacific Journal of Accounting &
Economics
This
paper examines a two-country dynamic general equilibrium model with endogenous
fertility. We show that the introduction of child-rearing behavior brings about
new properties in long-run dynamics. After an analysis of the existence,
uniqueness, and local stability of the long-run equilibrium, we examine the
international trade pattern and comparative statics in order to identify the
differences with the standard dynamic international trade model.
Akihiko Yanase (Tohoku University) and Weijia Dong (Nagoya University)
gOpen-Access Renewable Resources as Inputs and International Trade: A Small
Open Economyh
Asia-Pacific Journal of Accounting &
Economics
This paper develops a small-open-economy model in which two final goods
are produced by using a primary factor and a resource good, which has an
open-access property and is produced from the primary factor. Under the
assumption that only the final goods are tradable, the economyfs patterns of
specialization both in the temporary equilibrium and in the steady state are
derived. It is shown that in the steady state, the economy either completely
specializes in one good or diversifies production, depending on the labor
endowment and the growth rate of the resource. The long-run effects of trade on
the resource stock and national welfare are also examined.
November
2011
Takumi
Naito (Waseda University)
gA
Ricardian model of trade and growth with endogenous
trade statush
Journal of
International Economics
We formulate a
two-country, continuum-good Ricardian model of trade
and endogenous growth with endogenous trade status. After establishing the
existence, uniqueness, and global stability of a balanced growth path, we show
that, compared with the old balanced growth path, a permanent fall in the trade
cost in any one country: (i) raises the growth rates
of capital in all countries for all periods; (ii) increases both the range of
the imported varieties and that of the exported varieties in all countries for
all periods; and (iii) raises welfare in all countries. Our theoretical
predictions are qualitatively consistent with the empirical evidence.
Tsuyoshi
Toshimitsu (Kwansei Gakuin University)
gNOTE
ON THE WELFARE EFFECT OF SECOND-BEST POLICIES IN A NETWORK INDUSTRY: A MONOPOLY
CASEh
Metroeconomica
We show that the
welfare effect of second-best policies such as a subsidy/tax and quality
regulation in the case of a monopoly in a network industry depends on the
strength of network effects. That is, focusing on the case in which the network
effect is smaller (larger) than the marginal cost of production for the small
(large) network effect, it is demonstrated that in the case of a small (large)
network effect, an output and a quality-improving subsidy (tax) policy are
socially optimal, and a government should commit to a minimum (maximum) quality
standard.
Kenji
Fujiwara (Kwansei Gakuin
University)
gVoracity,
growth and welfareh
Economics
Letters
This
paper explores some implications of the comparison between feedback Nash and Stackelberg equilibria for growth
and welfare in a `voracity' model. We show that as compared to the Nash
equilibrium, the Stackelberg equilibrium involves a
lower growth rate while it leaves both the leaders and the followers better
off, i.e., the Stackelberg equilibrium is Pareto
superior to the Nash equilibrium.
Kenji
Fujiwara (Kwansei Gakuin
University) and Ngo Van Long (McGill University)
gWelfare implications of leadership in a resource market under bilateral
monopolyh
Dynamic Games
and Applications
Formulating
a dynamic game model of a world exhaustible resource market, this paper studies
welfare implications of Stackelberg leaderships for
an individual country and the world. We overcome the problem of
time-inconsistency by imposing a ''credibility condition'' on the Markovian strategy of the Stackelberg
leader. Under this condition, we show that the presence of a global Stackelberg leader leaves the follower worse off relative
to the Nash equilibrium. Moreover, the world welfare is highest in the Nash
equilibrium as compared with the two Stackelberg equilibria.
Yasuhiro
Takarada (Nanzan
University), Weijia Dong (Nagoya University), and
Takeshi Ogawa (Nagoya University)
gShared Renewable Resources: Gains from Trade and Trade Policyh
Review of
International Economics
This
paper examines the effects of international trade and trade policy in a
two-country, two-good model with an open-access renewable resource that is
internationally shared. We show that both countries may still benefit from
trade when they specialize in the production of their comparative advantage
good, although the shared resource is reduced by trade. In addition, we
demonstrate that the steady state utility of a resource-good importing country
may be reduced by trade, even if it specializes in the production of a
non-resource good. Import tariffs and export taxes on a resource good may
increase or decrease the shared stock level depending on the production
patterns in a trading steady state. The trade policy is likely to be
Pareto-improving when the shared stock rises, while both countries may be made
worse off by the trade policy when the shared stock falls.
October
2011
Kozo
Kiyota (Yokohama National University)
gA Many-cone World?h
Journal of
International Economics
The
breakdown of global factor price equalization, or a single-cone world, is a
central concern in various fields of economics. This paper examines the
empirical validities of the following two claims: 1) the multiple-cone Heckscher-Ohlin (HO) model fits better than does the
single-cone HO model; and 2) increases in the number of cones improve the fit
of the model. One of the contributions of this paper is that it focuses
simultaneously on factor endowments, production patterns, and wage disparities
across economies. My empirical results support the first claim but not the
second claim. The results suggest that although the multiple-cone model
performs better than does the single-cone model, the increases in the number of
cones do not necessarily result in better performance of the HO model.
August
2011
Takumi
Naito (Waseda University)
gAid
for trade and welfareh
Japanese
Economic Review
A new foreign
aid initiative called Aid for Trade is intended to improve a recipient's
trade-related infrastructure which lowers its trade costs. We formulate a two-country,
continuum-good Ricardian model, where each country's
transport cost is inversely related to its effective public services which are
subject to congestion. Our numerical experiments show that an increase in the
donor's aid/GDP ratio within a certain range raises
welfare in both countries if the recipient's relative income tax rate is
sufficiently small.
Kazuhiro
Takauchi (Onomichi
University)
gRules
of origin and international R&D rivalryh
Economics
Bulletin
We study a
three-country three-firm free trade area (FTA) trade model with rules of origin
(ROO) under international R&D competition. The external tariff is chosen by
the country importing final goods in the FTA. If the FTA chooses a higher
content rate of ROO, the country importing final goods chooses a higher tariff
in order to compensate for lower consumer surplus. We have three results.
First, if the FTA raises the content rate, it raises the costs of exporters
within the area, but if the R&D cost is sufficiently low, the exporters actually
increase exports and their profits also increase. Second, if the firms within
the FTA are less efficient than outsiders, the social welfare of countries
importing final goods is affected by the content rate in a U-shaped fashion. A
tightening of ROO may reduce the social welfare of importing countries since it
may replace productive firms outside the FTA with less productive local firms.
Third, if the productivity within an FTA is relatively high, the optimal
content rate of ROO for the importing country within the FTA is 100%. In that
case, the country importing final goods does not need to rely on imports from
outside. Since an increase in the content rate of ROO increases external
tariff, the most stringent ROO requirement is desirable for that country.
Wanida Ngienthi
(Assumption University), Yan Ma (Kobe University), and Fumio Dei (Kobe
University)
gSupermodularity and Global Supply Chains without the Southh
Review
of International Economics
We investigate
why the South is hardly involved in the global supply chain for the Boeing 787.
We demonstrate that if the production process is supermodular,
the South is excluded from global supply chains.
July
2011
Shigeto Kitano (Kobe University)
gCapital
Controls and Welfareh
Journal of
Macroeconomics
This
paper computes welfare levels under different degree of capital controls and
compares them with the welfare level under perfect capital mobility by using
the methodology of Schmitt-Grohe and Uribe
(2007). We show that perfect capital mobility is not always optimal and that
capital controls may enhance an economy's welfare level. There exists an
optimal degree of capital-account restriction that achieves a higher level of
welfare than that under perfect capital mobility, if the economy has costly
financial intermediaries. The results of our analysis imply that as the
domestic financial intermediaries are less efficient, the government should
impose stricter capital controls in the form of a tax on foreign borrowing.
Kozo Kiyota (Yokohama National University)
gPaths of Development and Wage Variationsh
Review of
International Economics
In
analyzing the relationship between factor endowments and sectoral
per capita output (the paths of development), it was shown empirically that the
number of cones was neither one nor three but two, and that all countries fall
into one of these two cones. This is a puzzle, because it is inconsistent with
large wage variations across economies. This paper attempts to solve this
puzzle, introducing complete and incomplete specialization into a multiple-cone
model. Empirical results reveal that the two-cone Heckscher-Ohlin
(HO) model can be consistent with HO specialization and wage variations across
economies.
Kozo Kiyota (Yokohama National University)
gA test of the
law of comparative advantage, revisitedh
Review of World
Economics
This
paper reconsiders one of the fundamental results in trade theory: the law of
comparative advantage from an empirical point of view. The contribution of this
paper is to conduct a test of the law of comparative advantage that is
consistent with both balanced and unbalanced trade. To do so, this paper
utilizes not only net exports valued at autarky prices but also those valued at
free trade prices. The results support the empirical validity of the law of
comparative advantage even after trade imbalances are taken into account.
Kozo Kiyota (Yokohama National University)
gExports and
Jobs: The Case of Japan, 1975-2006h
Contemporary
Economic Policy
This
paper asks how much employment is created by increasing goods and services
exports and how the export dependence of employment has changed over time.
Using the newly developed Japanese input-output table for 1975-2006, this paper
estimates the effect of exports on an industryfs employment (i.e., direct effect)
and the effect on other industries' employment (i.e., indirect effect). One of
our major findings is that the magnitude of the indirect effect exceeded that
of the direct effect over almost the entire period. This implies that more than
half of the effects of exports appeared through intraindustry
linkages. We also found the indirect effect of goods exports is not limited to
goods industries. As a result, the increases in the export dependence of
employment are not limited to major Japanese export-oriented industries such as
electrical machinery, motor vehicles, and general machinery. In identifying the
potential risks of negative external shocks, it is important for policy makers
to estimate how much employment is indirectly as well as directly dependent on
exports.
Wolfgang Eggert (University of Freiburg), Jun-ichi
Itaya (Hokkaido University), and Kazuo Mino (Kyoto
University)
gA Dynamic Model
of Conflict and Appropriationh
Journal of
Economic Behavior and Organization
This
paper presents an extension of a static model of economic conflict analyzed by
(Hirshleifer, 1991) and (Hirshleifer,
1995) and Skaperdas (1992) to an infinite horizon
differential game. Our aim is to highlight the strategic role of appropriation
among a smaller group of agents in an intertemporal
context. The model yields the conclusion that there exists a unique
linear/nonlinear Markov perfect equilibrium strategy, even when strategies are
defined over the entire state space. We demonstrate that "partial
cooperation" can be seen as a long-run response to conflict. Moreover, a
decrease in the effectiveness of appropriation, the depreciation rate of a
common-pool stock, the rate of time preferences or an increase in the
"degree of noise" improves the degree of "partial
cooperation" and thus welfare in an anarchic society.
Seiya Fujisaki (Shinshu
University) and Kazuo Mino (Kyoto University)
gGrowth and
Distributional Effects of Inflation with Progressive Taxationh
Economics
Bulletin
This
paper examines the growth and income distribution effects of inflation in a
growing economy with heterogeneous households and progressive income taxation.
Assuming that the cash-in-advance constraint applies to investment as well as
to consumption spending, we show that a higher growth of monetary supply yields
a negative impact on growth and an ambiguous effect on income distribution.
Numerical examples with plausible parameter values, however, demonstrate that
those long-run effects of money growth are rather small. In
contrast, fiscal distortion caused by progressive taxation yields significant
impacts on growth and distribution.
Angus C. Chu
(Shanghai University of Finance and Economics, Durham University) and Yuichi
Furukawa (Chukyo University)
gOn the Optimal
Mix of Patent Instrumentsh
Journal of
Economic Dynamics and Control
A
special characteristic of the patent system is that it features multiple
patent-policy levers that can be employed by policymakers. In this note, we
develop an R&D-based growth model to analyze the optimal mix of patent
instruments by considering patent breadth and the division of profit in
research joint ventures. Our results are as follows. First, we analytically
derive the optimal mix of patent breadth and the profit-division rule. Then, we
calibrate the model to quantitatively evaluate the welfare gain from optimizing
both patent instruments versus optimizing only patent breadth. We find that the
welfare gain can be quantitatively significant.
June 2011
Akihiko Yanase (Tohoku University)
gImpatience, Pollution, and Indeterminacyh
Journal of
Economic Dynamics and Control
This
paper examines an equilibrium growth model in which production activities
generate environmental pollution that has a negative welfare effect and in which
individual households' subjective discount rate is a function of individual
consumption, which is internal to each household, and of total pollution, which
is an external factor to the individual agents. It is shown that there may exist multiple steady states and that the dynamic
equilibrium may display indeterminacy, depending on the properties of the
discount-rate function, the pollution-capital relationship in production
technology, and the pollution-consumption relationship in instantaneous utility.
The long-run effects of tighter environmental policy are subsequently examined,
and the results are also found to be dependent on the above factors.
May 2011
Yoshinori Kurokawa (University of Tsukuba)
gIs a skill
intensity reversal a mere theoretical curiosum? Evidence from the US and
Mexicoh
Economics
Letters
A
rising skill premium in two countries can be explained by the Heckscher-Ohlin model assuming a "skill intensity
reversal." This assumption, however, poses an empirical challenge
since past research has found little evidence for the so-called "factor
intensity reversal." We now show clear-cut evidence for the existence of a
skill intensity reversal.
Kenji Fujiwara (Kwansei Gakuin University)
gTariffs and
trade liberalization with network externalitiesh
Australian
Economic Papers
This
paper constructs a reciprocal market model of intra-industry trade of network
goods to consider the implications of network externalities for an optimal
tariff policy and the welfare effects of bilateral tariff reductions. We show
that the degree of network externalities nontrivially affects the sign of the
Nash equilibrium tariff. Then, we prove that network externalities amplify the
gains from tariff reductions. These results help better understand the
implications of trade-related issues in network industries.
Tetsuya Saito
(SUNY at Buffalo)
gHow Do We Get
Cobb-Douglas and Leontief Functions from CES Function: A Lecture Note on
Discrete and Continuum Differentiated Object Modelsh
Journal of
Industrial Organization Education
Most
lectures teach the relationship between the CES, Cobb-Douglas and Leontief
functions using the value of elasticity of substitution, namely in the discrete
object model. This lecture note aims at being a reference for algebraic
computations of the Leontief and Cobb-Douglas functions by taking limits of CES
functions both in discrete and continuum goods models. The argument on the
discrete case uses l'Hôpital's rule as usually done.
The argument on the continuum case also uses l'Hôpital's
rule to show the convergence to the Cobb-Douglas function. To show the
convergence to the Leontief function, however, we rely on the squeeze
principle.
Jota Ishikawa (Hitotsubashi U), Kazuharu Kiyono (Waseda U), and Morihiro Yomogida (Sophia U)
gIs Emission Trading Beneficial?h
Japanese Economic Review
<http://hermes-ir.lib.hit-u.
We develop a two-country (North and South), two-good, general equilibrium model
of international trade in goods and explore the effects of domestic and
international emission trading under free trade in goods. Whereas domestic
emission trading in North may result in carbon leakage by expanding South's
production of the emission-intensive good, international emission trading may
induce North to expand the production of the
emission-intensive good by importing emission permits. Emission trading may
deteriorate global environment. North's (South's) emission trading may not
benefit South (North). International emission trading improves global
efficiency but may not benefit both countries.
April 2011
Wanida Ngienthi
(Assumption University) and Fumio Dei (Kobe University)
gThe Impact of
Differential Falls in Offshoring Costs on Welfareh
Review of
International Economics
We
highlight the fact that offshoring firms and local firms that do not offshore
coexist in the North. Adopting Dei's (2010) approach to offshoring, we
demonstrate that a fall in offshoring costs in any sector makes the South
better off and that if offshoring costs in a high-technology sector fall at a
faster rate, the North is worse off, and vice versa.
March 2011
Yasushi Kawabata
(Nagoya City University)
gCost
Asymmetries and Industrial Policy in Vertically Related Marketsff
Manchester
School
In
this paper we examine how the conventional finding from de Meza (Canadian
Journal of Economics, Vol. 19 (1986), pp. 347-350) and Neary
(Journal of International Economics, Vol. 37 (1994), pp. 197-218) that the
country with the lowest-cost firm provides the highest subsidy modifies in a
model of vertically related markets characterized by Cournot
competition. We show that the country where the sum of the costs of final-good
production and intermediate-good production are the lowest provides the largest
production subsidies to the final good and/or the intermediate good.
January 2011
Akihiko Yanase (Tohoku University)
gTariff and Environmental Tax Reforms in a Polluted Small Open Economy with
Public Productionh
FinanzArchiv
This
paper presents a general-equilibrium model of a small open economy, in which
the production process of private goods generates pollution, and the government
finances the production cost of a public consumption good through revenue from
tariffs and pollution taxes. Since a variety of distortions, including
pollution, trade protection, and public production, exist,
a change in tariffs and/or environmental taxes affects economic welfare, both
directly and indirectly. Taking these effects into account, the conditions for
welfare-enhancing, piecemeal policy reform are derived.
Masao Oda
(Ritsumeikan University) and Koji Shimomura (Kobe
University)
gA Model of Welfare Enhancing Capital Importsh
Review of
International Economics
This
paper proposes a model of welfare enhancing capital imports in a
multi-dimensional framework. Contrary to the pessimistic conventional wisdom of
capital imports and welfare, we provide a justification for the acceptance of
foreign capital in developing countries.