This paper examines the existence of social welfare functions satisfying some reasonable axioms of distributive equity and Pareto efficiency in aggregating infinite utility streams. Our main results show that there exist social welfare functions that satisfy both the Pigou-Dalton transfer principle and weak dominance.a weak version of the Pareto principle., but there exists no social welfare function that satisfies any of our distributive equity axioms and weak Pareto principle simultaneously. Thus, we prove that no Paretian ranking can satisfy numerical representability and any of distributive equity axioms in the setting of intertemporal social choice.
{"title":"IMPOSSIBILITIES OF PARETIAN SOCIAL WELFARE FUNCTIONS FOR INFINITE UTILITY STREAMS WITH DISTRIBUTIVE EQUITY","authors":"Norihito Sakamoto","doi":"10.15057/25385","DOIUrl":"https://doi.org/10.15057/25385","url":null,"abstract":"This paper examines the existence of social welfare functions satisfying some reasonable axioms of distributive equity and Pareto efficiency in aggregating infinite utility streams. Our main results show that there exist social welfare functions that satisfy both the Pigou-Dalton transfer principle and weak dominance.a weak version of the Pareto principle., but there exists no social welfare function that satisfies any of our distributive equity axioms and weak Pareto principle simultaneously. Thus, we prove that no Paretian ranking can satisfy numerical representability and any of distributive equity axioms in the setting of intertemporal social choice.","PeriodicalId":43705,"journal":{"name":"Hitotsubashi Journal of Economics","volume":"53 1","pages":"121-130"},"PeriodicalIF":0.6,"publicationDate":"2012-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66730351","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In a country such as China, which maintains strict controls on foreign exchange and frequently intervenes in the currency market, it is not surprising that the local currency is persistently undervalued in nominal terms. Normally, one would expect such a policy of deliberate currency undervaluation to result in a sharp rise in domestic prices, with abnormally low prices reversed not through an appreciation of the nominal exchange rate but through a rise in domestic prices. Why is this not occurring in China? A possible explanation is that, due to certain structural reasons, the equilibrium real exchange rate for China is considerably lower than that of other developing countries. Taking this hypothesis as our point of departure, we examine how undervalued the Chinese yuan is in terms of purchasing power parity by comparing China's experience with other developing countries and the development process of developed countries in the past. In addition, we construct an open economy growth model with three sectors, where - similar to the Lewis growth model - there is surplus labor in the primary sector. Using this model, we analyze the relationship between the economic growth process and the level of absolute prices (real exchange rate). We show that the absolute price level will not increase until the economy reaches the Lewisian turning point. In addition, we show that in an economy like China, where there are strong barriers to the migration of labor to the manufacturing sector and where the ratio of net exports of goods and services to GDP is high, the economy will not reach the turning point until GDP per worker reaches a certain level.
{"title":"China's Economic Growth, Structural Change and the Lewisian Turning Point","authors":"K. Fukao, Tangjun Yuan","doi":"10.15057/25383","DOIUrl":"https://doi.org/10.15057/25383","url":null,"abstract":"In a country such as China, which maintains strict controls on foreign exchange and frequently intervenes in the currency market, it is not surprising that the local currency is persistently undervalued in nominal terms. Normally, one would expect such a policy of deliberate currency undervaluation to result in a sharp rise in domestic prices, with abnormally low prices reversed not through an appreciation of the nominal exchange rate but through a rise in domestic prices. Why is this not occurring in China? A possible explanation is that, due to certain structural reasons, the equilibrium real exchange rate for China is considerably lower than that of other developing countries. Taking this hypothesis as our point of departure, we examine how undervalued the Chinese yuan is in terms of purchasing power parity by comparing China's experience with other developing countries and the development process of developed countries in the past. In addition, we construct an open economy growth model with three sectors, where - similar to the Lewis growth model - there is surplus labor in the primary sector. Using this model, we analyze the relationship between the economic growth process and the level of absolute prices (real exchange rate). We show that the absolute price level will not increase until the economy reaches the Lewisian turning point. In addition, we show that in an economy like China, where there are strong barriers to the migration of labor to the manufacturing sector and where the ratio of net exports of goods and services to GDP is high, the economy will not reach the turning point until GDP per worker reaches a certain level.","PeriodicalId":43705,"journal":{"name":"Hitotsubashi Journal of Economics","volume":"86 1","pages":"147-176"},"PeriodicalIF":0.6,"publicationDate":"2012-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66730290","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We compare the costs oftwo regulatory policies about the entry ofnew firms. We consider an incumbent firm that has more information about the market demand than the regulator and can use this advantage to persuade the regulator to make entry more difficult. With the first regulatory policy the regulator uses the incumbent price pre-regulation to get information about the demand. With the second regulatory policy the regulator designs a mechanism to motivate the incumbent firm to price truthfully. We conclude that for a wide range ofsituations, social welfare is strictly higher with the more active regulatory policy.
{"title":"Should Regulators Be More Proactive About Entry? An Evaluation under Asymmetric Information","authors":"Paula Sarmento, A. Brandão","doi":"10.15057/23147","DOIUrl":"https://doi.org/10.15057/23147","url":null,"abstract":"We compare the costs oftwo regulatory policies about the entry ofnew firms. We consider an incumbent firm that has more information about the market demand than the regulator and can use this advantage to persuade the regulator to make entry more difficult. With the first regulatory policy the regulator uses the incumbent price pre-regulation to get information about the demand. With the second regulatory policy the regulator designs a mechanism to motivate the incumbent firm to price truthfully. We conclude that for a wide range ofsituations, social welfare is strictly higher with the more active regulatory policy.","PeriodicalId":43705,"journal":{"name":"Hitotsubashi Journal of Economics","volume":"53 1","pages":"71-84"},"PeriodicalIF":0.6,"publicationDate":"2012-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66729999","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I examine employment dynamics of married women with a particular focus on the role of part-time work using panel data from South Korea.Using a dynamic multinomial logit model with random effects, I find that a part-time work alternative substantially reduces the probability of being out of the labor market for mothers of young children and that the probability of moving into full-time employment is highest among all transition probabilities for part-time workers.These results suggest that part-time employment may act as a stepping stone toward full-time work for women who have been out of the labor market.
{"title":"Employment Dynamics of Married Women and the Role of Part-time Work: the Case of Korea","authors":"Taehyun Ahn","doi":"10.15057/23150","DOIUrl":"https://doi.org/10.15057/23150","url":null,"abstract":"I examine employment dynamics of married women with a particular focus on the role of part-time work using panel data from South Korea.Using a dynamic multinomial logit model with random effects, I find that a part-time work alternative substantially reduces the probability of being out of the labor market for mothers of young children and that the probability of moving into full-time employment is highest among all transition probabilities for part-time workers.These results suggest that part-time employment may act as a stepping stone toward full-time work for women who have been out of the labor market.","PeriodicalId":43705,"journal":{"name":"Hitotsubashi Journal of Economics","volume":"53 1","pages":"25-38"},"PeriodicalIF":0.6,"publicationDate":"2012-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66730021","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this study, using the multinomial logit model, we investigate what factors influence farmers. choices between the alternatives of agricultural work, nonagricultural work, temporary migration, and permanent migration.We find that improving education can help local areas retain their surplus farmers, who can then work in local nonagricultural jobs or migrate permanently.
{"title":"Could Education Retain Farmers in the Local Area","authors":"Hongfei Zhu, Lixin He, Tangjun Yuan","doi":"10.15057/23149","DOIUrl":"https://doi.org/10.15057/23149","url":null,"abstract":"In this study, using the multinomial logit model, we investigate what factors influence farmers. choices between the alternatives of agricultural work, nonagricultural work, temporary migration, and permanent migration.We find that improving education can help local areas retain their surplus farmers, who can then work in local nonagricultural jobs or migrate permanently.","PeriodicalId":43705,"journal":{"name":"Hitotsubashi Journal of Economics","volume":"53 1","pages":"39-47"},"PeriodicalIF":0.6,"publicationDate":"2012-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66729884","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In a non-welfaristic framework, Sen (1993) extends the first fundamental welfare theorem by demonstrating that the market mechanism also promotes individual freedom efficiently. This paper has a two-fold purpose. First, in order to investigate extensions of the first and the second welfare theorems, we present an analytical framework in which each agent is endowed with three types of preference relations: an allocation preference relation, an opportunity preference relation, and an overall preference relation. We demonstrate that under certain conditions, the two welfare theorems can be extended. Second, we describe the restrictive nature of the underlying conditions for these positive results.
{"title":"EXTENSIONS OF THE FUNDAMENTAL WELFARE THEOREMS IN A NON-WELFARISTIC FRAMEWORK","authors":"Koichi Tadenuma, Yongsheng Xu","doi":"10.15057/23145","DOIUrl":"https://doi.org/10.15057/23145","url":null,"abstract":"In a non-welfaristic framework, Sen (1993) extends the first fundamental welfare theorem by demonstrating that the market mechanism also promotes individual freedom efficiently. This paper has a two-fold purpose. First, in order to investigate extensions of the first and the second welfare theorems, we present an analytical framework in which each agent is endowed with three types of preference relations: an allocation preference relation, an opportunity preference relation, and an overall preference relation. We demonstrate that under certain conditions, the two welfare theorems can be extended. Second, we describe the restrictive nature of the underlying conditions for these positive results.","PeriodicalId":43705,"journal":{"name":"Hitotsubashi Journal of Economics","volume":"53 1","pages":"107-120"},"PeriodicalIF":0.6,"publicationDate":"2012-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66729940","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Immigration restrictions usually arise from the idea that immigrants compete with original residents for jobs. Their effects on urban job creation are often ignored. In this study, we develop an inner-city dual labor market model that incorporates both of those effects, and apply it to empirical studies on China. We find that rural-urban immigration does not contribute to urban unemployment in China. Migrants take away some jobs from residents, but at the same time, they lower equilibrium wages and increase output, which expand the demand for resident workers. This latter positive impact is larger than the former substitution effect in China.
{"title":"Does Internal Immigration Always Lead to Urban Unemployment in Emerging Economies? : A Structural Approach Based on Data from China","authors":"Y. Liu","doi":"10.15057/23146","DOIUrl":"https://doi.org/10.15057/23146","url":null,"abstract":"Immigration restrictions usually arise from the idea that immigrants compete with original residents for jobs. Their effects on urban job creation are often ignored. In this study, we develop an inner-city dual labor market model that incorporates both of those effects, and apply it to empirical studies on China. We find that rural-urban immigration does not contribute to urban unemployment in China. Migrants take away some jobs from residents, but at the same time, they lower equilibrium wages and increase output, which expand the demand for resident workers. This latter positive impact is larger than the former substitution effect in China.","PeriodicalId":43705,"journal":{"name":"Hitotsubashi Journal of Economics","volume":"53 1","pages":"85-105"},"PeriodicalIF":0.6,"publicationDate":"2012-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66729953","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study employs the Granger causality test within a multivariate cointegration and error-correction framework to investigate the relationship between health care spending, income and relative price in Malaysia. This study covers the annual sample from 1970 to 2009. The main findings of this study are that in the short-run there is uni-directional Granger causality running from relative price to health care spending, while relative price and income are bidirectional Granger causality in Malaysia. In the long-run health care spending and income are bi-directional Granger causality, while there is uni-directional Granger causality running from relative price to health care spending and income. In addition, we also extend the study to examine the dynamic interaction between the variables in the system through the forecast error variance decomposition and impulse response function analyses. In line withth e finding of Granger causality, all the variables behaved endogenously in the long-run. Thus, the variables are Granger-causes each other in the long-run even though there might be deviations in the short-run.
{"title":"Multivariate granger causality and the dynamic relationship between health care spending, income and relative price of health care in Malaysia","authors":"C. Tang","doi":"10.15057/22028","DOIUrl":"https://doi.org/10.15057/22028","url":null,"abstract":"This study employs the Granger causality test within a multivariate cointegration and error-correction framework to investigate the relationship between health care spending, income and relative price in Malaysia. This study covers the annual sample from 1970 to 2009. The main findings of this study are that in the short-run there is uni-directional Granger causality running from relative price to health care spending, while relative price and income are bidirectional Granger causality in Malaysia. In the long-run health care spending and income are bi-directional Granger causality, while there is uni-directional Granger causality running from relative price to health care spending and income. In addition, we also extend the study to examine the dynamic interaction between the variables in the system through the forecast error variance decomposition and impulse response function analyses. In line withth e finding of Granger causality, all the variables behaved endogenously in the long-run. Thus, the variables are Granger-causes each other in the long-run even though there might be deviations in the short-run.","PeriodicalId":43705,"journal":{"name":"Hitotsubashi Journal of Economics","volume":"52 1","pages":"199-214"},"PeriodicalIF":0.6,"publicationDate":"2011-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66729587","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper develops a simple test for the null hypothesis of no unit root for panel data with cross-sectional dependence in the form of a common factor in the disturbance. We do not estimate the common factor but mop-up its effect by employing the same method as the one proposed in Pesaran (2007) in the unit root testing context. We show that our test is asymptotically locally optimal, although the optimality is not guaranteed under a wide range of the alternative.
{"title":"A LOCALLY OPTIMAL TEST FOR NO UNIT ROOT IN CROSS-SECTIONALLY DEPENDENT PANEL DATA*","authors":"K. Hadri, Eiji Kurozumi","doi":"10.15057/22026","DOIUrl":"https://doi.org/10.15057/22026","url":null,"abstract":"This paper develops a simple test for the null hypothesis of no unit root for panel data with cross-sectional dependence in the form of a common factor in the disturbance. We do not estimate the common factor but mop-up its effect by employing the same method as the one proposed in Pesaran (2007) in the unit root testing context. We show that our test is asymptotically locally optimal, although the optimality is not guaranteed under a wide range of the alternative.","PeriodicalId":43705,"journal":{"name":"Hitotsubashi Journal of Economics","volume":"52 1","pages":"165-184"},"PeriodicalIF":0.6,"publicationDate":"2011-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66729539","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper, we theoretically analyze Microsoft's tying practice in the instant messenger market. Using a model that highlights distinct features of the instant messenger, which are different from the cases of the web browser and the media player, we show that Microsoft can leverage its monopoly power in the operating system (OS) market to the instant messenger market through tying strategy. Microsoft's messenger tying hurts consumers because it enables Microsoft to monopolize messenger market and so fully exploit consumer's willingness to pay to the OS-messenger bundle. However, since tying saves installing costs, consumer loss is not so serious that total surplus improves under messenger tying. Finally we show that such results are robust to the possibilities of multi-homing in the instant messenger market.
{"title":"Anti-competitiveness of Instant Messenger Tying by Microsoft","authors":"Jaehong Kim, S. Bang, Sunjoo Hwang","doi":"10.15057/22027","DOIUrl":"https://doi.org/10.15057/22027","url":null,"abstract":"In this paper, we theoretically analyze Microsoft's tying practice in the instant messenger market. Using a model that highlights distinct features of the instant messenger, which are different from the cases of the web browser and the media player, we show that Microsoft can leverage its monopoly power in the operating system (OS) market to the instant messenger market through tying strategy. Microsoft's messenger tying hurts consumers because it enables Microsoft to monopolize messenger market and so fully exploit consumer's willingness to pay to the OS-messenger bundle. However, since tying saves installing costs, consumer loss is not so serious that total surplus improves under messenger tying. Finally we show that such results are robust to the possibilities of multi-homing in the instant messenger market.","PeriodicalId":43705,"journal":{"name":"Hitotsubashi Journal of Economics","volume":"52 1","pages":"185-198"},"PeriodicalIF":0.6,"publicationDate":"2011-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66729579","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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