In this paper, we develop a novel approach to estimate the compensation of employees as a portion of Japan's gross domestic income. The methodology is characterized by its extensive use of comprehensive taxation data, and all data used is publicly available. Our estimates turn out to be larger than the numbers in the official statistics, and the difference has been widening in recent years. In addition, the discrepancy of the two estimates for net lending/borrowing between non-financial and financial transactions accounts (in theory, they should be the same) shrinks when the former is recalculated based on our estimates, both for households and for corporations.
{"title":"Estimating Compensation of Employees Based on Taxation Data","authors":"Hiroyuki Fujiwara, Yasutaka Ogawa","doi":"10.1111/jere.12158","DOIUrl":"10.1111/jere.12158","url":null,"abstract":"<p>In this paper, we develop a novel approach to estimate the compensation of employees as a portion of Japan's gross domestic income. The methodology is characterized by its extensive use of comprehensive taxation data, and all data used is publicly available. Our estimates turn out to be larger than the numbers in the official statistics, and the difference has been widening in recent years. In addition, the discrepancy of the two estimates for net lending/borrowing between non-financial and financial transactions accounts (in theory, they should be the same) shrinks when the former is recalculated based on our estimates, both for households and for corporations.</p>","PeriodicalId":45642,"journal":{"name":"Japanese Economic Review","volume":"69 4","pages":"394-413"},"PeriodicalIF":1.2,"publicationDate":"2017-10-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1111/jere.12158","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74591675","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 presents a two-country two-commodity dynamic model where one country achieves full employment and the other suffers from secular stagnation of aggregate demand. Own and spillover effects of changes in preference, productivity and policy parameters are examined. Parameter changes that improve the stagnant country's current account, such as a reduction in government purchases, a decrease in foreign aid and an improvement in productivity, raise the relative price of the home commodity. Consequently, home employment shrinks, deflation worsens and consumption decreases. The terms of trade for the full-employment country deteriorate. Thus, income and consumption decrease in both countries.
{"title":"Macroeconomic Interdependence Between a Stagnant and a Fully Employed Country","authors":"Yoshiyasu Ono","doi":"10.1111/jere.12156","DOIUrl":"10.1111/jere.12156","url":null,"abstract":"<p>This paper presents a two-country two-commodity dynamic model where one country achieves full employment and the other suffers from secular stagnation of aggregate demand. Own and spillover effects of changes in preference, productivity and policy parameters are examined. Parameter changes that improve the stagnant country's current account, such as a reduction in government purchases, a decrease in foreign aid and an improvement in productivity, raise the relative price of the home commodity. Consequently, home employment shrinks, deflation worsens and consumption decreases. The terms of trade for the full-employment country deteriorate. Thus, income and consumption decrease in both countries.</p>","PeriodicalId":45642,"journal":{"name":"Japanese Economic Review","volume":"69 4","pages":"450-477"},"PeriodicalIF":1.2,"publicationDate":"2017-09-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1111/jere.12156","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125313027","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 investigates the effects of bank mergers on client firms. A rich panel of data detailing firm borrowing from individual banks enables controls for demand-side effects to isolate the effect of bank mergers on the supply of credit. The impact of bank mergers on other firm outcomes (growth in total borrowing, distance to default and investment) is also examined. A merger announcement by a firm's main bank results in a contraction in credit supply from the merging bank. Firms are not able to compensate for the reduced credit supply from the main bank, so overall borrowing also declines.
{"title":"Effect of Bank Mergers on Client Firms: Evidence from the Credit Supply Channel","authors":"Heather Montgomery, Yuki Takahashi","doi":"10.1111/jere.12157","DOIUrl":"10.1111/jere.12157","url":null,"abstract":"<p>This study investigates the effects of bank mergers on client firms. A rich panel of data detailing firm borrowing from individual banks enables controls for demand-side effects to isolate the effect of bank mergers on the supply of credit. The impact of bank mergers on other firm outcomes (growth in total borrowing, distance to default and investment) is also examined. A merger announcement by a firm's main bank results in a contraction in credit supply from the merging bank. Firms are not able to compensate for the reduced credit supply from the main bank, so overall borrowing also declines.</p>","PeriodicalId":45642,"journal":{"name":"Japanese Economic Review","volume":"69 4","pages":"438-449"},"PeriodicalIF":1.2,"publicationDate":"2017-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1111/jere.12157","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130220314","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 constructs a variety expansion growth model that integrates basic research to analyse its effects on household welfare. In our model, the research sector consists of applied and basic research components. The former creates blueprints and expands the variety of goods available for consumption, whereas the latter adds to the public-knowledge stock. The analysis yields several results. First, the steady-state welfare-maximizing level of basic research is below the steady-state growth-maximizing level. Second, a consideration of the welfare effects during the transition path suggests that marginal changes in the level of basic research can increase household welfare even at its steady-state welfare-maximizing level. Third, by using data from Japan, we calibrate the model and find that an increase in basic research spending raises household welfare.
{"title":"Basic and Applied Research: A Welfare Analysis","authors":"Kunihiko Konishi","doi":"10.1111/jere.12154","DOIUrl":"10.1111/jere.12154","url":null,"abstract":"<p>This study constructs a variety expansion growth model that integrates basic research to analyse its effects on household welfare. In our model, the research sector consists of applied and basic research components. The former creates blueprints and expands the variety of goods available for consumption, whereas the latter adds to the public-knowledge stock. The analysis yields several results. First, the steady-state welfare-maximizing level of basic research is below the steady-state growth-maximizing level. Second, a consideration of the welfare effects during the transition path suggests that marginal changes in the level of basic research can increase household welfare even at its steady-state welfare-maximizing level. Third, by using data from Japan, we calibrate the model and find that an increase in basic research spending raises household welfare.</p>","PeriodicalId":45642,"journal":{"name":"Japanese Economic Review","volume":"69 4","pages":"414-437"},"PeriodicalIF":1.2,"publicationDate":"2017-08-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1111/jere.12154","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120924436","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 sets up a monopolistic competition model featuring the returns to production specialization. Some novel results are derived from the analysis. First, the effect of a fiscal stimulus on consumption may be positive or negative, depending crucially upon whether the production function is characterized by increasing or decreasing returns to production specialization. Second, following a fiscal expansion, increasing returns to specialization lead to a positive linkage between real wages and aggregate output, while decreasing returns to specialization result in a negative relationship between real wages and aggregate output. Third, a fiscal expansion may raise social welfare, provided that the degree of increasing returns to production specialization is sufficiently large.
{"title":"Fiscal Stimulus and Endogenous Firm Entry in a Monopolistic Competition Macroeconomic Model","authors":"Cheng-Wei Chang, Ching-Chong Lai, Juin-Jen Chang","doi":"10.1111/jere.12155","DOIUrl":"10.1111/jere.12155","url":null,"abstract":"<p>This paper sets up a monopolistic competition model featuring the returns to production specialization. Some novel results are derived from the analysis. First, the effect of a fiscal stimulus on consumption may be positive or negative, depending crucially upon whether the production function is characterized by increasing or decreasing returns to production specialization. Second, following a fiscal expansion, increasing returns to specialization lead to a positive linkage between real wages and aggregate output, while decreasing returns to specialization result in a negative relationship between real wages and aggregate output. Third, a fiscal expansion may raise social welfare, provided that the degree of increasing returns to production specialization is sufficiently large.</p>","PeriodicalId":45642,"journal":{"name":"Japanese Economic Review","volume":"69 2","pages":"207-225"},"PeriodicalIF":1.2,"publicationDate":"2017-08-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1111/jere.12155","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81864599","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 an endogenous growth model that incorporates wealth-enhanced preferences for social status and labour market frictions to investigate the role of social status in determining unemployment and long-run growth. We show that the increase in the desire for social status reduces the unemployment rate, but its effect on long-run growth is unclear. We then calibrate our model to the US economy and find that an increase in the desire for social status lowers the unemployment rate and enhances the economic growth rate in the long run.
{"title":"Social Status, Labour Market Frictions and Endogenous Growth","authors":"Hung-Ju Chen, Dongpeng Liu, Xiangbo Liu","doi":"10.1111/jere.12153","DOIUrl":"10.1111/jere.12153","url":null,"abstract":"<p>This paper develops an endogenous growth model that incorporates wealth-enhanced preferences for social status and labour market frictions to investigate the role of social status in determining unemployment and long-run growth. We show that the increase in the desire for social status reduces the unemployment rate, but its effect on long-run growth is unclear. We then calibrate our model to the US economy and find that an increase in the desire for social status lowers the unemployment rate and enhances the economic growth rate in the long run.</p>","PeriodicalId":45642,"journal":{"name":"Japanese Economic Review","volume":"69 2","pages":"226-250"},"PeriodicalIF":1.2,"publicationDate":"2017-07-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1111/jere.12153","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127113748","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}
The growth of non-standard employment has become a cause for concern for policy-makers trying to boost output and keep unemployment low while also maintaining job security. This paper estimates a dynamic unobserved effects model using the Keio Household Panel Survey, an individual-level panel data set, to investigate the effects on future employment opportunities of employment in Japan's non-standard employment and regular employment sectors. I find strong evidence of persistence within the labour market, suggesting that past employment experience has a significant impact on future labour market outcomes.
{"title":"Employment Status Persistence in the Japanese Labour Market","authors":"Jess Diamond","doi":"10.1111/jere.12148","DOIUrl":"10.1111/jere.12148","url":null,"abstract":"<p>The growth of non-standard employment has become a cause for concern for policy-makers trying to boost output and keep unemployment low while also maintaining job security. This paper estimates a dynamic unobserved effects model using the <i>Keio Household Panel Survey</i>, an individual-level panel data set, to investigate the effects on future employment opportunities of employment in Japan's non-standard employment and regular employment sectors. I find strong evidence of persistence within the labour market, suggesting that past employment experience has a significant impact on future labour market outcomes.</p>","PeriodicalId":45642,"journal":{"name":"Japanese Economic Review","volume":"69 1","pages":"69-100"},"PeriodicalIF":1.2,"publicationDate":"2017-06-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1111/jere.12148","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78604052","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}
The accumulation of pollution negatively impacts human health. Extreme increases in pollution, in particular, may have lethal implications for human beings, and, indeed, all living organisms. This paper thus devises a new model of economic growth that takes into account these lethal effects of accumulated pollution via a pollution threshold to show two key results. First, if an abatement technology is relatively inefficient, there exists a stationary steady state in which consumption and pollution stop growing. Second, if the abatement technology is sufficiently efficient, there exists a path along which pollution decreases at an accelerating rate until it finally reaches zero. In this case, consumption grows at a constant rate.
{"title":"Lethal Effects of Pollution and Economic Growth: Efficiency of Abatement Technology","authors":"Asuka Oura, Yasukatsu Moridera, Koichi Futagami","doi":"10.1111/jere.12151","DOIUrl":"10.1111/jere.12151","url":null,"abstract":"<p>The accumulation of pollution negatively impacts human health. Extreme increases in pollution, in particular, may have lethal implications for human beings, and, indeed, all living organisms. This paper thus devises a new model of economic growth that takes into account these lethal effects of accumulated pollution via a pollution threshold to show two key results. First, if an abatement technology is relatively inefficient, there exists a stationary steady state in which consumption and pollution stop growing. Second, if the abatement technology is sufficiently efficient, there exists a path along which pollution decreases at an accelerating rate until it finally reaches zero. In this case, consumption grows at a constant rate.</p>","PeriodicalId":45642,"journal":{"name":"Japanese Economic Review","volume":"69 2","pages":"189-206"},"PeriodicalIF":1.2,"publicationDate":"2017-05-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1111/jere.12151","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133736257","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 considers the macroeconomic effects of retailer market concentration and buyer-size discounts on inflation dynamics. During Japan's “lost decades”, large retailers enhanced their market power, thus increasing the exploitation of buyer-size discounts in the procurement of goods. We incorporate this effect into an otherwise standard New Keynesian model. Calibrating to the Japanese economy during the lost decades, we find that these developments led to a deflation of approximately 0.1% annually.
{"title":"Retailer Market Concentration, Buyer-Size Discounts and Inflation Dynamics","authors":"Mayumi Ojima, Junnosuke Shino, Kozo Ueda","doi":"10.1111/jere.12150","DOIUrl":"10.1111/jere.12150","url":null,"abstract":"<p>This study considers the macroeconomic effects of retailer market concentration and buyer-size discounts on inflation dynamics. During Japan's “lost decades”, large retailers enhanced their market power, thus increasing the exploitation of buyer-size discounts in the procurement of goods. We incorporate this effect into an otherwise standard New Keynesian model. Calibrating to the Japanese economy during the lost decades, we find that these developments led to a deflation of approximately 0.1% annually.</p>","PeriodicalId":45642,"journal":{"name":"Japanese Economic Review","volume":"69 1","pages":"101-127"},"PeriodicalIF":1.2,"publicationDate":"2017-05-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1111/jere.12150","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85192379","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}
{"title":"Empirical Studies on Firm Dynamics, Job Creation and Productivity Growth in East Asia and Beyond: Introduction","authors":"Hyunbae Chun, Hyeog Ug Kwon","doi":"10.1111/jere.12149","DOIUrl":"10.1111/jere.12149","url":null,"abstract":"","PeriodicalId":45642,"journal":{"name":"Japanese Economic Review","volume":"68 2","pages":"135-136"},"PeriodicalIF":1.2,"publicationDate":"2017-05-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1111/jere.12149","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122749505","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}